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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. 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...

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