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Indictment: Durham looted Fair Finance

IBJ Staff
December 24, 2011
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Indianapolis financier Tim Durham was indicted on wire and securities fraud charges in March—the culmination of a federal probe that began in 2009.

Prosecutors say that after buying Akron, Ohio-based Fair Finance Co. in 2001, Durham and fellow Indianapolis businessman Jim Cochran raided its coffers to fund a lavish lifestyle as well as a host of money-losing businesses they controlled.

One example from the felony indictment: In early 2008, when Fair’s finances were dire, Durham pulled out $150,000 for a gambling spree.

Authorities say Durham and Cochran pulled money out with such abandon that they left Fair without the means to repay the Ohio investors who had purchased unsecured investment certificates. More than 5,200 investors are owed more than $230 million.

Also indicted was Rick Snow, who was Fair’s chief financial officer. He is accused of participating in the fraud, but unlike Durham and Cochran he isn’t accused of taking out millions of dollars in insider loans he lacked the means to repay.

Durham, Cochran and Snow deny wrongdoing.

Fair shut down following an FBI raid in November 2009. The raid occurred about a month after IBJ published a story highlighting the massive insider loans and questioning whether the company could repay investors.

Durham is on house arrest while he awaits his trial, which is scheduled for June 2012.

Fair Finance’s bankruptcy trustee, Brian Bash, for nearly two years has been trying to scrounge up assets to reduce investors’ losses. As part of that effort, he has reached settlements with seven Indiana politicians or campaign committees that received donations from Durham, who had been one of the biggest supporters of GOP candidates in the state.

In the largest deal to date, former Marion County Prosecutor Carl Brizzi and his campaign committee in November agreed to return nearly $200,000.

The trustee contends the political donations were fraudulent transfers because they were made when Durham and his companies were insolvent.•

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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