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Durham prosecutors ask to admit IBJ story as evidence

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The prosecution in the Tim Durham fraud trial on Wednesday sought to introduce into evidence an IBJ investigative report from October 2009, but a judge agreed with a defense attorney and denied the request.

The prosecution asked to include the Oct. 24, 2009, story as Exhibit 113 shortly after FBI Special Agent Dennis Halliden, the lead investigator in the case, began his testimony Wednesday afternoon.

The report, written by IBJ Managing Editor Greg Andrews, detailed how Durham and his partners and related firms had taken more than $168 million in so-called related-party loans from Ohio-based Fair Finance Co. The loans represented about 70 percent of Fair's assets and a dramatic change in business model from before Durham and partner and co-defendant Jim Cochran acquired the comsumer-loan company in 2002.

Durham defense attorney John Tompkins objected to the prosecution's request under federal courts evidentiary Rule 403, under which a judge can exclude relevant evidence if its tendency to prejudice a jury outweighs its value in evidence.

"It is a critical article by a journalist," Tompkins argued. "We don't know the sources."

Later, during a break, Tompkins told a reporter he had never seen a prosecutor attempt to introduce a newspaper article into evidence.

Assistant U.S. Attorney Winfield Ong told Judge Jane Magnus-Stinson that the jury should be able to see the article for context, without relying on the facts contained within.

A chunk of the prosecution's evidence in the case centers around the reaction to the story by the defendants, both in e-mails and on phone calls the government recorded under an authorization it requested shortly after the article appeared.

"It's been discussed at length here, and by at least two witnesses, and extensively on the wiretaps," Ong said of the IBJ story. "It would be puzzling at best for the jury not to have it."

Magnus-Stinson sided with the defense and did not admit the story into evidence, but noted Rule 403 provides for a sliding scale, allowing her the option to change her mind as the case proceeds.

The article, which highlighted disclosures Fair had made in legalese-laden offering circulars, led some Fair investors in Ohio to ask questions or request refunds of their investments. Ohio regulators also put up roadblocks to a request by Fair to sell another $250 million in investment certificates.

Matthew Ogden, a former investor relations employee with Fair, said Wednesday that he reviewed the offering circulars more carefully and began raising questions after seeing the IBJ story.

He said he was already skeptical of his bosses since they asked him and other employees to blame computer glitches when investors asked about missing interest payments. The checks were piling up at the office he worked at in Wooster, Ohio, but the orders had been to delay sending them.

Also Wednesday, the prosecution played a recording of a November 2009 phone conversation between Cochran and Gary Zuercher, who expressed concern about his mother's investment with Fair Finance after reading the IBJ story.

Cochran said the story was payback from IBJ co-owner Mickey Maurer, who Cochran claimed had lost millions of dollars on an investment in Obsidian Enterprises before Durham took the company private.

Maurer said he never purchased any Obsidian stock.

Cochran continued, describing IBJ's reporting as "yellow journalism and quite frankly libelous and tortuous."

"Uhm, there's nothing in there, there's nothing at Fair Finance that he's done illegal," Cochran said, according to a transcript. "There's nothing we've ever hid from anybody."

Zuercher asked whether Fair had filed suit against IBJ.

Cochran replied that the company had decided not to sue "right now" because the story's author, Greg Andrews, would "like to just raise this thing up to, to many many different levels then can still write whatever he damn well pleases."

To catch up on IBJ's coverage of Durham and Fair Finance, click here.

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  • Never sued
    Wrong, pull the Tim Durham v John Doe case in Hamilton County which he got renewed every six months....

    note gary sallee is of course the attorney....wait, isn't he allegedly living in Tim's mansion for free? Didn't he allegedly get something like a million bucks for his racing venture that he allegedly never paid a penny back on....Just asking, not saying...

    Timothy S Durham vs. John Doe 1 §
    §
    §
    §
    §
    Case Type: PL - Civil Plenary
    Date Filed: 01/23/2007
    Location: Hamilton Superior Court 2
    Party Information
    Attorneys
    Defendant
    John Doe 1
    No Summons Provided

    Defendant
    John Doe 2
    No Summons Provided

    Plaintiff
    Durham, Timothy S
    No Address Provided
    Gary D. Sallee

    Retained
    111 Monument Circle
    Ste. 4800
    Indianapolis, IN 46204

    317-416-9543(W)
    Events & Orders of the Court
    01/23/2007 Converted Event
    132.00 Assessed CIV CIVIL FILING FEE 7/0
    PET 0001 USER: LAR
    01/23/2007 Converted Event
    132.00 Total Payment CA LR CR
    193847 PET 0001 USER: LAR
    01/23/2007 Converted Event
    NF COMPLAINT FOR DAMAGES AND INJUNCTIVE
    RELIEF FILED. ORDER SUBMITTED.

    CR0202 USER: CR
    01/23/2007 Converted Event
    Appearance filed by Gary D. Sallee on behalf
    Plaintiff.

    cb0206 USER: CSB
    01/23/2007 Converted Event
    Plaintiff's Non-Party Request for Production
    of Documents to Yahoo! Inc. filed.

    cb0206 USER: CSB
    01/23/2007 Converted Event
    Motion for Expedited Discovery filed and
    Order submitted.

    cb0206 USER: CSB
    01/31/2007 Converted Event
    Order Graning Amended Motion for Expedited
    Discovery entered.

    cb0206 ORDER RJO USER: CSB
    05/07/2007 Converted Event
    2.50 Assessed MIS Miscellaneous
    PLA 0001 USER: CJH2
    05/07/2007 Converted Event
    2.50 Total Payment CK ch1271 COP
    009523 PLA 0001 USER: CJH2
    11/02/2007 Converted Event
    5.00 Assessed MIS Miscellaneous
    PLA 0001 USER: KAC
    11/02/2007 Converted Event
    5.00 Total Payment CA KG CD
    241973 PLA 0001 USER: KAC
    07/28/2010 Notice Issued
    Comes now the Court and sets this cause for hearing on September 22, 2010, at 9:00 a.m. to show cause why said cause should not be dismissed for want of prosecution pursuant to Trial Rule 41-E. If a judgment has been entered in this cause, said judgment shall remain in full force and effect.
    07/28/2010 Notice Issued
    Comes now the Court and sets this cause for hearing on September 22, 2010, at 9:00 a.m. to show cause why said cause should not be dismissed for want of prosecution pursuant to Trial Rule 41-E. If a judgment has been entered in this cause, said judgment shall remain in full force and effect.
    07/28/2010 Hearing Scheduling Activity
    Hearing on Motion for 41E Dismissal scheduled for 09/22/2010 at 9:00 AM.
    08/04/2010 First Class Mail Returned
    Civil Notice Sent to Gary D Sallee - RETURN TO SENDER, ATTEMPTED, NOT KNOWN
    09/22/2010 CANCELED Hearing on Motion for 41E Dismissal (9:00 AM) (Judicial Officer Pfleging, Daniel J)
    Other
    09/27/2010 Hearing Scheduling Activity
    Hearing on Motion for 41E Dismissal scheduled for 09/22/2010 at 9:00 AM was cancelled. Reason: Other.
    10/11/2010 Notice of Hearing Issued
    Case reset for TR41E hearing on 11/1/10, at 8:30 a.m. Any judgments will remain in full force and effect.
    10/11/2010 Hearing Scheduling Activity
    Hearing on Motion for 41E Dismissal scheduled for 11/01/2010 at 8:30 AM.
    10/12/2010 Hearing Scheduling Activity
    Hearing on Motion for Rule to Show Cause scheduled for 10/27/2010 at 8:30 AM.
    10/13/2010 RJO Entry
    Judge's Entry of October 5, 2010: Comes now the Court on its own motion and resets this matter for the 27th day of October, 2010 at 8:30 a.m. for the Plaintiff to show cause why this cause of action shall not be dismissed for want of prosecution pursuant to Trial Rule 41(e). An appearance by counsel for Plaintiff is required. SO ORDERED this 6th day of October, 2010.
    Order Signed: 10/06/2010
    Vol./Book RJO
    10/18/2010 First Class Mail Returned
    41E Notice-CCS Entry, return marked NOT DELIVERABLE AS ADDRESSED
    Party: Sallee, Gary D.
    10/18/2010 First Class Mail Returned
    Notice, return marked NOT DELIVERABLE AS ADDRESSED
    Party: Sallee, Gary D.
    10/21/2010 Clerk Administrative Event
    Comes now the Court pursuant to Trial Rule 41(E), and orders the Plaintiff/Judgment Creditor to show cause in writing on or before why all pending proceedings should not be dismissed/vacated and this cause removed from the active docket for failure of the Plaintiff/Judgment Creditor to take any action in the last 60 days. Any judgment shall remain in full force and effect and the case subject to redocketing for collection.
    10/27/2010 Hearing on Motion for Rule to Show Cause (8:30 AM) (Judicial Officer Pfleging, Daniel J)
    Calendar Entry Only - DLH
    11/01/2010 Hearing on Motion for 41E Dismissal (8:30 AM) (Judicial Officer Pfleging, Daniel J)
    11/01/2010 First Class Mail Returned
    Notice, return marked NOT DELIVERABLE AS ADDRESSED
    Party: Sallee, Gary D.
    File Stamp: 10/29/2010
    11/05/2010 Order Granting Motion to Dismiss
    Order Signed: 11/05/2010
    Vol./Book RJO
  • Oops
    Looks like yours wasn't....

    Reieved.. It's relieved with an L....since typos are so important to you...kind of like the "typos" in those backdated loan agreements Timmy raced to get done on the eve of the raid....not that anyone is saying his buddies downtown tipped him off....
  • Reieved...
    Thanks Mike, that changes everything. Without that important clarification the article makes no sense. Pat yourself on the back for the great catch. It shows your money was well spent on your law degree....
    • Typo
      It's Federal Rule of Evidence 403 (not 43).

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