IBJNews

Fraud victims detail losses before Durham's sentencing

Back to TopCommentsE-mailPrintBookmark and Share

A 74-year-old former nun who now cares for young children so she can earn a living after being swindled out of her life savings said Friday morning that she can forgive convicted Ponzi schemer Tim Durham.

But Barbara Lukacik, who invested $125,000 with Akron, Ohio-based Fair Finance Corp., which was co-owned and operated by Durham, insisted that justice must be served.

“What has happened is shameful,” she said during Durham’s sentencing hearing. “Yes, the economy was weak, but that didn’t give you the right to steal not only my money but the money of all the people who invested in Fair Finance. And you say you haven’t hurt anyone; let’s be real.”

Lukacik and three other investors who lost their life savings to Fair Finance testified Friday on the behalf of federal prosecutors, who are asking that the 50-year-old Durham and accomplices Jim Cochran and Rick Snow receive sentences that will put them in prison for the rest of their lives.

Durham faces 225 years in prison, Cochran 145 years and Snow 85 years. The trio is set to be sentenced Friday afternoon.

Durham’s lawyer, John Tompkins, in a Monday court filing asked that the former Indianapolis businessman be given a five-year sentence that would include three years in prison followed by two years of home confinement.

The sentencing comes three years after FBI agents raided Fair Finance and Obsidian Enterprises, a Durham company located on the 48th floor of Chase Tower in Indianapolis.

A federal jury in June found Durham guilty on all 12 felony fraud charges stemming from the collapse of Fair.

Durham co-owned the firm with Cochran, who was convicted of eight of 12 felony charges. Snow, the company’s chief financial officer, was convicted on five of 12 counts.

Prosecutors charge that after Durham and Cochran bought Fair in 2002, they raided its coffers to fund their lavish lifestyles and to cover losses at failing businesses they owned.

The huge withdrawals—which were recorded as loans but were not repaid—left Fair without the means to repay 5,000 Ohio residents who purchased more than $200 million of the company’s unsecured investment certificates.

Early Friday morning, lawyers for Durham, Cochran and Snow argued for leniency, claiming Fair Finance contained more than $40 million in assets at the time of the FBI’s raid on Fair and Obsidian.

They also contended that it was not the intent of the three to defraud investors but simply to delay payments on their investments.

Further, John Tompkins, Durham’s lawyer, said his client had no control over the investments.

“Investors were investing in Fair, not with Mr. Durham individually,” he said. “He did not have control over the terms of the contract.”

After Tompkins questioned the number of victims defrauded, Judge Jane Magnus-Stinson lost a bit of patience with the defense, telling them she had read all 1,035 letters received from victims, some of which said they could not afford eye glasses or now were receiving heating assistance due to their losses.

“You need to tread a little bit lightly on that with me,” she said. “Trust me on that.”

Among those offering testimony Friday was Janey Kalina, whose father lost more than $170,000 investing proceeds from the sale of a family farm. She said her 86-year-old father lost everything, can't afford assisted living and now has nothing to pass on to his children.

Other victims who testified included Dewayne McVay, who lost $180,000, and Kristen Schroeder, who lost $60,000.

McVay said he lost $180,000 from a life insurance policy that he collected after his son, a Marine, was killed in an accident after his return from fighting in Iraq.

Federal attorney Winfield Ong said prosecutors wish they could recover more assets for victims.

In lobbying for the stiff sentences, prosecutors argue that at least $208 million in investor money had been squandered, while only about $6 million has been collected from Fair’s debtors, with almost no prospect for more recoveries.

“We would love to see some assets for the victims,” Ong said. “Unfortunately, that has not happened.”

But perhaps the harshest words were spoken by Lukacik, the retired nun from Ohio.

“Shame on you,” she said as she wrapped up her testimony.
 

ADVERTISEMENT

  • re
    Do you think a woman wearing a tight skirt who is out too late deserves to be gang-raped? In this particular case it is true that the investors "shoudl have known" and had they been sophisticated investors who had been told there was a different owner now and that the owner was gambling their money away at casinos and on paid girlfriends and that by the way no profits were being made to pay back even 1/100th of the debt because of the few businesses generating income none of then except one were solvent and that company maybe made $2M in ADJUSTED EBIDTA I suspect that even the most unsophisitcated investors would have put their money in their pillowcase instead. Now then, of the sophisitcated investors who woke up after Greg's article, both Tim and Jim replied that Greg was a muckracker with an agenda for his boss and i was stalking Tim and neither of us were credible, and so no, do not blame the investors. Why don't you ask Tim's FRIENDS, none of whom showed up today, WTF they thought they were getting as "loans" when they knew darned well they weren't being asked to pay a penny back and did they think that was their share of his timely trades on two certain stocks we all know he did not guess to buy? Why don't you ask a certain buddy who really bought his books and paid for that celebrity bus and whether or not he has or is going to pay all that money he received back to the trustee? Or how about his attorney John Tompkins himself, ask him if it's true he received a million bucks for "defending" Tim and what the rules are on a defense attorney receiving funds he knows to be fraudulently obtained--if, in fact that happens to be the case, I would not know because I don't know JT, but it seems everyone who is close to Tim knows he didn't go out and earn the money. KUDOS to Greg Andrews who broke this case by using common sense and looking at where Tim was suddenly coming up with ludicrous amounts of money to just give any and all who asked, and staying on this case to the point of sentencing, and for Cory Schouten who also did such an amazing job here AND broke the Carl Brizzi mess up in northern Indiana--curious to see if the feds or anyone will ever do anything on that while his buddy John Bales awaits his fate.
  • Too good to be true
    While I in NO WAY defend the actions of Mr. Durham or his associates, I question the motive of the investors in Fair Finance. When the business was sold, did any of them do any due diligence to find out who they were now investing with? Furthermore, those that invested because Fair offered better return rates than the market should have taken to the old adage that if it is too good to be true then it probably is. From what I have read, Fair's rates were considerably higher. That should have been a red flag. The investors are guilty of their own greed and paid the ultimate price for the risk they were taking. The shame rests on the shoulders of both parties.
    • Re
      Supposedly JT got $1M for the "defense" which I thin kthe trustee is legally allowed to recoup.
    • Scumbag
      Today is a great day, one of the most arrogant men to ever walk the Earth is going to jail. Wanna be Hugh Hefner, flying in a bunch of D-list celebrities, wanna be playmates to throw playboy sex parties at your house....was it all worth it Timmy??? there are still a lot of scumbags out there that benefitted from him....i can't wait for all the crap to be released about what a scumbag this guy is. Indy has a huge crowd here, i call them the 'wanna be hollywood crowd', that think they are superior but in reality they are just fake like Timmy. Lots of others like him are out there, and wait till the IRS comes rolling thru! hope you have memories of you and your other politician phonies at the sex parties!!! loser!
    • Let them feel some pain
      The Judge needs to give them a long sentence but let them out when they turn 80 or 85 so they will know what its like to be old and poor. Shame on all 3 of these guys for taking advantage of the elderly.
    • Burn Baby Burn
      Let them guys go to prison for a long time. Let ol' Timmy think about all those parties he threw on those people's dime as he lays on that six inch padded bed. Hope those memories last him for the rest of his life, because he is going to need them. I won't even discuss what was going on in those parties or who was there (former prosecutor, cough cough)...
    • What do Tim and Mark Miles have in common
      Joanne SerVaas. Mark dated her for years during college and after. Tim later married her
    • Really?
      The bankruptcy attorney should sue this Tompkins guy for the defense bill. This is seriously the worst ATTEMPT of a defense i've ever seen. Not saying Tim is innocent but the other guys have public defenders that did a better job. He shoulda made a plea deal if he isn't gonna defend himself. What an idiot! I woulda fled the country if this was my attorneys plan!

      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. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

      2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

      3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

      4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

      5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

      ADVERTISEMENT