IBJNews

Feds say wiretaps show evidence of financial plot

Back to TopCommentsE-mailPrintBookmark and Share

A federal judge in Indianapolis refused to throw out wiretap evidence in the $200 million fraud trial of a former Indiana businessman as the government outlined a case largely based on those recordings.

U.S. District Court Judge Jane Magnus-Stinson on Monday rejected arguments for the defense that the FBI had failed to show probable cause before obtaining permission for the wiretaps.

Transcripts of about a dozen of the wiretaps included in a brief filed Friday by the government show financier Tim Durham and his business partners discussing how to hide from investors that Fair Finance was running out of money in 2009, prosecutors said. Meanwhile the partners were raiding the company to finance their lavish lifestyles and unsuccessful businesses, prosecutors said.

Magnus-Stinson's rejection marked the second time in the past month that Durham's attorneys have come up short in getting the wiretap evidence thrown out.

In a phone conversation on Nov. 9, 2009, Durham and partner James F. Cochran agreed to close the Ohio offices of Fair Finance with no advance notice, using Veterans Day as an excuse. According to the government filing, they were really trying to conceal the fact that there wasn't enough money to pay customers when their investments came due.

"So we're going to buy a day," Cochran told Durham in a phone call, according to the transcripts. "And I told (a Fair Finance employee) ... make sure you don't tell customers in advance."

"Why?" Durham asked.

"He said 'cause they will run in on Tuesday," Cochran said.

"Oh yeah, good story," Durham said, according to the transcript.

In yet another recorded phone call, Durham recommended to another partner, Rick D. Snow, that they overwhelm an Ohio securities official with paperwork to get regulators to approve $250 million in investment certificates.

"My guess is the guy at the State of Ohio isn't a financial genius," Durham said, according to the transcript.

"Yeah, no, I think you're right," Snow said.

"And I think if we absorb, eh, you know, overwhelm him with stuff, that may be the better approach," Durham said. "What do you think?"

"Yeah, I don't know. I ..." Snow said.

"You know: lists and lists and lists of investments," Durham said, according to the transcript.

Durham's lawyer, John L. Tompkins, called the wiretap transcripts misleading in an interview with The Indianapolis Star on Monday. He said the FBI recorded more than 1,800 phone conversations but filed transcripts of only 19 conversations.

"We're confident that when people hear the full conversations, not just the government's excerpts of some of the conversations, it will be clear there is no conspiracy to commit any kind of fraud," Tompkins said.

"They know the filings that they make are going to be read by the press," Tompkins told The Associated Press on Tuesday. "And I think what they want to do is exactly what they did ... get four sentences ... on the front page of the newspaper."

Tompkins said he disagreed with the order rejecting the motion to suppress the wiretaps, but added, "I think the judge did a good, thorough job going through everything we presented."

Durham, Cochran and Snow, were indicted last year on 10 counts of wire fraud, one count of securities fraud and one count of conspiracy to commit wire and securities fraud. Their trial is scheduled for June 8.

Magnus-Stinson last month rejected Durham's request that she dismiss the charges against him because he said the wiretaps were illegal.

Attorneys for Cochran and Snow did not return phone calls seeking comment Tuesday.

All of IBJ's coverage of the Durham case can be found here.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1

ADVERTISEMENT