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Prosecutors concede no ground in Tim Durham’s appeal

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Greg Andrews

Prosecutors who secured hefty prison sentences for three Fair Finance Co. executives last fall say in a new court filing that every basis of the trio’s legal appeal is bogus.

Fair co-owners Tim Durham and Jim Cochran, along with Chief Financial Officer Rick Snow, argued in September that their June 2012 criminal convictions stemmed from a string of legal missteps, starting with a court’s misguided decision to allow the FBI to conduct wiretaps without first demonstrating that “ordinary investigative techniques failed or were unlikely to succeed.”

Their attorneys are seeking a new trial, arguing the jury never should have heard the incriminating phone conversations that capture Durham and Cochran in a panicked quest to whitewash Fair’s financial problems and raise more money from investors.

However, in a 96-page brief filed with the U.S. Court of Appeals in Chicago on Dec. 3, prosecutors insisted that the FBI pursued wiretaps in late 2009 only after investigating the business using less-invasive techniques for 7-1/2 months.

During that span, the filing says, the FBI used confidential informants, analyzed 6,400 wire transactions, secured grand jury subpoenas for records, and began seeking an order to release Durham’s tax returns.

“These extensive, good faith efforts fatally undermine defendants’ charge that the government ‘rushed immediately’ to get a wiretap and ‘casually disregarded’ other ‘obvious avenues of investigation’ in an ‘endeavor merely to click boxes,’” the prosecutors’ brief said.

Prosecutors used the wiretaps to full effect at the eight-day trial, playing them day after day as they cast Durham as the mastermind behind a massive Ponzi scheme at the Akron, Ohio-based company.

The business was funded by more than 5,000 mom-and-pop Ohio investors who purchased more than $200 million in unsecured notes from Fair boasting interest rates as high as 9 percent. Prosecutors say Durham burned through that money to finance a lavish lifestyle, ply friends and prop up other businesses he owned.

The outcome of the trial was disastrous for Durham, who was found guilty on all 12 felony counts and sentenced months later to 50 years in prison. Cochran, who was convicted on eight of 12 counts, received 25 years. Snow, convicted on five of 12 counts, got 10.

Attorneys for the three men fault Judge Jane Magnus-Stinson for not calling a mistrial when prosecutors, during closing statements, took “unfair advantage” of an inadvertent misstatement by Cochran’s public defender, William Dazey.

Dazey, who is not involved in the appeal, said in court he believed a “scheme to defraud” had occurred, something he later said he had not meant. Attorneys for the Fair executives argued that prosecutors twisted that “obvious misstatement” into a “critical concession.”

But prosecutors cast the comment as much ado about nothing. It is not unreasonable to think Dazey meant to say what he said, they argued. And in any case, the comment “did not invite the jury to short-circuit consideration of the evidence,” prosecutors wrote in their brief.

Durham, Cochran and Snow will remain in prison while the appeal plays out. Durham, 51, is at the federal penitentiary in McCreary, Ky. Cochran, 58, is in Greenville, Ill., and Snow, 50, is in Pekin, Ill.

Insiders take shine to stock

While Simon Property Group Inc. shares have performed spectacularly long term, they’ve been laggards of late, falling 2.4 percent over the last 52 weeks while the S&P 500 surged 28 percent.

So is the stock now a bargain? Two Indianapolis businessmen who serve as directors seem to think so, though their recent purchases are modest compared with their vast wealth.

Larry Glasscock, a former CEO of WellPoint Inc., on Nov. 26 spent $22,300 to buy 148 shares for an average of $150.52 apiece. On the same day, Allan Hubbard, chairman of E&A Industries, spent $19,400 to buy 129 shares at an average price of $150.50.

A Forbes contributor picked up on the purchases, noting that “presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market is they expect to make money.”•

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  • ...She only wishes she'd explained it better!
    The judge regretted not explaining the wire tap evidence to the defendants! Cheer up, Boys! You just finished the first year in the slammer!

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  1. Those of you yelling to deport them all should at least understand that the law allows minors (if not from a bordering country) to argue for asylum. If you don't like the law, you can petition Congress to change it. But you can't blindly scream that they all need to be deported now, unless you want your government to just decide which laws to follow and which to ignore.

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