Prosecution rests after testimony from Fair Finance trustee

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The government rested its fraud case against Tim Durham and two co-defendants Monday afternoon after pointing out just how little was left for investors in Fair Finance after an alleged Ponzi scheme.

Brian Bash, the man charged with recovering money for investors in the Ohio consumer-loan company, testified that his team has managed to recover just $5.6 million of more than $215 million in investor losses.

Bash, Fair's Chapter 7 bankruptcy trustee, was the final government witness and followed testimony from victims, accountants and former employees of Durham and co-defendants Jim Cochran and Rick Snow.

The trial began June 11. The defense is expected to call its first witness Tuesday morning and finish by the afternoon. Final arguments are expected late Tuesday afternoon, and the case likely will go to the jury Wednesday.

Bash said recovering funds for Fair investors has been difficult. He said he's managed to collect just $518,000 of the roughly $200 million in related-party loans Fair made to Durham, Cochran and related companies.

Under cross examination by Durham defense attorney John Tompkins, Bash acknowledged it is his "hope and belief" he'll be able to recover much more.

Tompkins also questioned Bash on a contingency-fee arrangement the trustee has requested that would pay his firm 30 percent of any recovery up to $50 million, 15 percent of anything between $50 million and $100 million, and 10 percent of anything over $100 million.

Moments before his testimony, Tompkins asked Judge Jane Magnus-Stinson to disqualify Bash for discussing the case over lunch with his attorney.

Tompkins called his own wife to the stand, who said she had heard Bash and attorney Kelly Burgan discussing the case at Paradise Cafe and Bakery.

Witnesses expected to testify aren’t permitted to interact with other witnesses or get updates on the testimony of others before they are questioned. Burgan has attended the entire trial.

Both Burgan and Bash said their discussion followed the court's order. The judge agreed, allowing Bash to testify.

Durham, Cochran and Snow, Fair's chief financial officer, are facing 10 counts of wire fraud, one count of securities fraud, and one count of conspiracy to commit wire fraud and securities fraud. The government alleges they bilked more than 5,000 Ohio investors out of $215 million by turning Fair into a Ponzi scheme. If convicted, they face decades in prison.

For all of IBJ's coverage of Fair Finance and Durham, click here.

The prosecution has based a good portion of its case on a series of government-recorded phone calls between Cochran and Durham. In a wiretap from Nov. 19, 2009, introduced as government evidence last week, Cochran and Durham briefly discuss the possibility that they could serve jail time. The recording appears below.

To hear audio from several other wiretaps between Durham and Cochran, click here.


  • Grasping at straws
    You're right, the coincidence of John Tompkins' wife being within earshot is a stretch, however even with that they're grasping at straws. Not much defense for what's gone one, gotta raise every question mark in the jury's mind that you can. This one might have backfired, though. Wonder how long the jury will have to stay out on this? Seems as if it should be a quick turnaround on most counts.
  • Re
    Maybe the judge should subpoena John's text and call records as well as those of his wife and see if she just happened to be coincidentally at the restaurant or if she followed them there--after all, how would she know what they look like? And she just happened to be sitting next to them? Kind of like Tomkins just happened to allegedly drive over to Ohio and have a meeting with Beverly Keller of the Budget Newspaper, the Bible for the Amish community and allegedly tell her that Timmy wasn't trying to get another $250M but only $600k! OMG, only in Indy....

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    1. You are correct that Obamacare requires health insurance policies to include richer benefits and protects patients who get sick. That's what I was getting at when I wrote above, "That’s because Obamacare required insurers to take all customers, regardless of their health status, and also established a floor on how skimpy the benefits paid for by health plans could be." I think it's vital to know exactly how much the essential health benefits are costing over previous policies. Unless we know the cost of the law, we can't do a cost-benefit analysis. Taxes were raised in order to offset a 31% rise in health insurance premiums, an increase that paid for richer benefits. Are those richer benefits worth that much or not? That's the question we need to answer. This study at least gets us started on doing so.

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