IBJNews

Judge moves Durham fraud trial to next year

Back to TopCommentsE-mailPrintBookmark and Share

A federal judge in Indianapolis on Thursday morning set a new trial date for indicted financier Tim Durham while his lawyers again argued for his release from a halfway house that a magistrate sent him to on Wednesday.

Judge Jane Magnus-Stinson vacated the original trial date of May 16 and instead set jury selection for June 8, 2012, a Friday.

The trial for Durham and two business partners would start the following Monday and could last four weeks, federal prosecutors estimated.

Durham along with James Cochran and Rick Snow are accused of defrauding about 5,000 investors in Akron, Ohio-based Fair Finance Co. of more than $200 million.

“The complexities of the case outweigh the public's and defendants’ interests in a speedy trial,” Magnus-Stinson said.

In the meantime, telephone conferences involving the judge, prosecutors and defense lawyers will be held every 60 days to monitor the status of the case.

A federal magistrate in Los Angeles on March 21 ordered Durham, who now lives in California, released on $1 million bond. The bond was posted by Joan and Beurt SerVaas, Durham’s ex-wife and her father. Durham had been held on home detention since his release.

He appeared for an information hearing on Wednesday, where Magistrate Kennard P. Foster, dissatisfied with Durham’s financial disclosures, ordered him to a halfway house at 611 N. Capital Ave. operated by Volunteers of America of Indiana Inc.

Durham’s lawyers objected to the seven-day lockdown but were overruled by Foster.

The magistrate set a time of 2 p.m. April 11 to re-evaluate Durham’s release from detention. However, Durham’s lawyer Thursday morning asked Magnus-Stinson to vacate Foster’s detention order and requested his release.

Howard Srebnick, of Miami, cited a previous federal case to argue that only a judge, and not a magistrate, can alter release orders.

“It appears that Magistrate Judge Foster did not have the authority to make the order,” Srebnick told Magnus-Stinson. “We simply ask that Judge Foster’s order be vacated, and [Durham] be released to home detention.”

Srebnick further argued that Durham poses no flight risk. But during Wednesday’s hearing, Foster ordered Durham to the halfway house because he said there’s a lot of money involved, and “money means flight.”

Magnus-Stinson took the matter under advisement and could rule as soon as the end of the day Thursday.

The judge did grant a request by Srebnick to allow Durham to meet with lawyers at a downtown law office until 4 p.m. Thursday.

Lawyers for Cochran and Snow also attended Thursday’s status conference.

Each defendant faces a maximum of five years in prison for the conspiracy charge, 20 years in prison for each wire fraud count, and 20 years in prison for the securities fraud. In addition, each could be fined $250,000 for each count on which they are convicted.

Charges stem from a lengthy FBI investigation that made headlines in November 2009 when agents raided offices of Durham's business, Obsidian, in Indianapolis and Fair’s Akron headquarters.

Prosecutors worked for more than a year to piece together the case and present it to a grand jury.

Cochran and Snow were released on their own recognizance following a March 16 initial hearing in Indianapolis before Magistrate Foster.

Durham and Cochran bought the then-68-year-old business for $23 million in 2002, using almost entirely borrowed money.

They immediately began doling out related-party loans, adding to the debt load, while scaling back what had been Fair’s profit-making business—buying customer-finance contracts from fitness clubs, time-share developers and other firms that offered customers extended-payment plans.

Durham and Cochran allegedly sold off additional receivables over the years to pay off investors even as they used money from Fair Finance to pay for extravagances like a $250,000 garage remodeling project, a $150,000 gambling spree and $50,000 in country club dues.

Fair Finance was forced into involuntary Chapter 7 bankruptcy in early 2010.

More of IBJ's coverage of Tim Durham and Fair Finance can be found here.
 

ADVERTISEMENT

  • Hidden
    This is where durham was clever paying cash out to the likes of Brizzi, Daniel's and many others over the years, he is now recalling the favours. I bet if he was held on remand the trial would be brought forward,but if he can afford Roy black he will still have two or three million put away, this will be looked after by his most trusted people I hope they know when it's found they will also do jail time for contempt. Burt will also be pulling strings to get him out, hence the closed court, for once I thought we had a strong judge, it was the best thing he could do sending Harry potter to the half way house Durham will never disclose where the rest of the cash is hidden. and to the judge do not believe the assett report you are given on monday Durham had 70 + cars for a kick off only 37 have been taken and sold
  • Who paid $23M
    great question, especially when you review the two offerings of $60m dated 10/01 and 12/01...that's $120M in offerings to help Tim pay an allegedly inflated price of $23M for a business that in MY OPINION was maybe worth $8M....but hey, what do I know....Mr. Fair took a seller note and kept his mouth shut despite allegedly figuring out Tim was up to no good...

    so...the real question is will the BK trustee go back against Don Fair for the portion of the seller note paid during hte 4 years prior to the BK?
  • follow the money
    who loaned the 23 million;who owned the businesses they bought? were the businesses worth the selling price?
    • doesnt have enough money
      Fair Finance stole a lot of money and Durham spent a lot of it. Wall Street leadership stole 100x these amounts and are free to walk the street. Durham just didnt make enough to escape the classification of middle-management-level white collar criminal.
    • JUDGE WORKS FOR MONEY
      IF MONEY IS INVOLVED AND THE PRICE IS RIGHT A DEAL IS MADE (ALWAY'S FOLLOW THE MONEY) AND THE TRUTH WILL BE FOUND
    • Speaking of Voter Fraud...
      Anybody have Dick Lugar's home address? I want to put him on my Christmas card list.
    • Special entitlement Care
      Had he been anyone else, he would be thrown in jail - Period. Held without bond. But he gave millions and millions of dollars to the GOP and thus he is entitled to special considerations - why anything less than what Charlie White is getting for felony theft and voting fraud.
      • Great timing
        Will be in the news cycle during a presidential election year. Dream come true for Dems, especially if Mitch decides to run.
      • Flight RIsk?
        You don't really think he'd stick his ex and her dad for $1MM, do you? Only a real scumbag would do something like that. Unless, of course, he's already paid them 10x that much....Hmmmm....
      • Air Africa
        Better keep a tab on those one-way tickets to Namibia, ala Kobi Alexander.
      • Are you kidding?
        No matter what his crime involved, he is charged with it. (Further, he stole more money than many bank robbers!) Why should he be given leniency? Put him in the halfway house and let him enjoy some PB&J for awhile!!!!
      • amazing!!!!!
        June 2012!!!!!! OMG!!! what is going on here!!!!!!!!!!!
      • Lifestyles Of Rich and Famous
        Will he be inviting camera crews into the halfway house to show it off?
      • Indiana is corrupt
        Wow! what corruption please let IBJ dig into this matter more, and find out who this judge is friends with!

      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. Angela IS the best RD

      2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

      3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

      4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

      5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help

      ADVERTISEMENT