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UPDATE: FBI searches Durham-owned company offices

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Ohio securities regulators say Tim Durham’s Fair Finance Co. won’t be permitted to sell additional investment certificates unless it satisfactorily answers a series of questions about the company’s ability to pay them back.

The FBI on Tuesday afternoon executed search warrants at Akron-based Fair and at Obsidian Enterprises Inc., Durham’s Indianapolis-based leveraged-buyout firm. FBI trucks late this afternoon were positioned on Monument Circle in Indianapolis as agents waited for boxes to be carried down from Obsidian’s headquarters atop Chase Tower.

The FBI action occurred the same day a 16-month-old securities registration that permitted Fair to sell investment certificates expired. An IBJ story last month raised questions about whether Fair, a consumer finance company, had the financial wherewithal to repay investors, who are owed about $200 million.

The investments paid substantially more than certificates of deposit, but unlike CDs they are not guaranteed by the government. The securities were sold only to Ohio residents, many of whom have only modest incomes.

Michael S. Welch, FBI special agent in charge in Indianapolis, said the search warrants executed Tuesday are sealed and that the FBI would not comment further.

IBJ’s story last month reported that since Durham, 47, bought Fair in 2002, he had used it almost like a personal bank to fund a range of business interests, some of them unsuccessful. The story noted that he and related parties owe Fair more than $168 million.

Dennis Ginty, a spokesman for the Ohio Department of Commerce, said Fair late last month filed papers seeking to register to sell additional investments certificates, but regulators told the company that it had to answer a series of questions before they would make a decision. Answers arrived today, Ginty said, and officials were beginning to go through them.

The whereabouts of Durham, 47, were not clear Tuesday. He did not respond to e-mail and voice mail messages from IBJ.

However, an attorney for the businessman told WTHR-TV in Indianapolis that Durham is cooperating with an investigation, the Associated Press reported Wednesday morning. Attorney John Tompkins said Durham is "convinced he has done nothing wrong."

Tompkins said Durham has been in Los Angeles on business for the past few months, but has been in contact with the FBI.

 

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  • When will this end?
    These corporate crooks are ruining America, when is this going to stop?
    • Tim
      In 2001,this article states Durham had apparently already spent what he ever made from SerVaas, evidenced by a massive IRS tax lien and two mortgages that prevented the Durham's from selling their house:

      http://74.125.95.132/search?q=cache:pSYCsx2931YJ:caselaw.findlaw.com/data2/indianastatecases/app/05070102.nhv.doc+joan+durham+ihsaa&cd=1&hl=en&ct=clnk&gl=us

      Yet, Durham managed to persuade Mr. Donald Fair to sell him Fair Finance on a seller note, since Durham did not have the capital to purchase Fair, and then went about raising massive amounts of money thru high interest rate investment certificates from unsuspecting Mennonite and Amish residents of Ohio. Massive to the tune of $1.5 BILLION:

      https://www.comapps.ohio.gov/secu/secu_apps/offering/offering.aspx

      (enter FAIR FINANCE in second box that says offerings, site takes about 40 seconds to load, then hit your page down button.)

      Keep in mind Fair Finance did about $28M in revenues last year and lost $1.8M. Yet, on October 30 (last month) Durham requested another $250M from Ohio residents; last year Tim did offerings for $250M in investment certificates, two years ago he did offerings for $250M AND he borrowed $50M of a $75M line of credit from Fortress:

      http://www.bartonesq.com/00144574.PDF

      Do the math, folks.
    • Hang 'em Frank!
      I agree with Frank, until these guys know they could be executed for their crimes they'll continue to do it...I like how in China they took the guy who was in charge of their equivilent of Consumer Safety (which has lower standards than US I'm guessin') and when it came out that all these toys had lead paint and other toxic chemicals, put the guy on trial, convicted him and executed him within a few days! Do that to a few of these Goldmine Sacks criminals, mortgage fraud a-holes, Ponzi scheme scum, etc. and see how it might be a deterrant! Of course it'll never happen here 'cause the bankers OWN the politicians. Most of Wall St. is just legalized theft anyway
    • Tim
      Hey Bill,

      I am a bit more concerned about what happened to my aunt's money that was loaned to what she thought was a reputable business as well as all the members of her Mennonite church who ignorantly invested in what they thought was a reputable business. $1.5 BILLION in investment certificates for Durham in the last 8 years--taken in by Fair Finance, a business that did $28M in revenues last year and lost $1.8M?

      If Durham isn't guilty please explain why he had multiple offices in the Amish and Mennonite communities that basically did nothing but sell thousands of these high interest rate (9% and even more when Bank One is offeri ng maybe 1%) certificates? In order to pay investors back, you have to have income, honey. INCOME! Not losses. And last time I looked I haven't seen Tony George or even Scott Jones, both of whom are actually wealthy, owning 3 Gulfstreams, a yacht, and constantly handing out $100 bills to strangers.

      But, you are right in that Durham is innocent until proven guilty. He might just have secret trees growing $100 bills in his backyard and inside his LA House. And, maybe Britney Spears really did call him to buy his house like he claimed in the IndianapolisMonthly article--at the very time she was having a psychiatric breakdown, she surely was able to track Durham down. You are right, maybe Durham just guessed that Brightpoint was going to avoid bankruptcy so he knew to timely buy all the stock in both Brightpoint and Cellstar (right before Brightpoint bought Cellstar) and it is just a coincidence that his business partner and best bud Dan Laikin happens to be the brother of the Brightpoint CEO. And, it could just be coincidence that despite all of this part of the monies raised in Ohio were diverted to perpetual money loser (gross revenues $208,000 last quarter) National Lampooon in the form of "loans," and that has nothing to do with Tim's insight to anything the Laikins were involved in, because you are right, people are innocent until they are proven guilty.

      It is true, however, that once you get dog shi* on your shoes, you never quite get it off, do you?
    • TIM
      WHAT HAPPENED TO INNOCENT UNTIL PROVEN GUILTY
      • congrats to Greg and IBJ
        Congratulations to Greg and IBJ for covering this story for years.
      • Hang him on a crane
        ...


        Forget murderers -- Can't we just hang a few bankers??


        Seems the Chinese have figured this one out.


        ...
        • Your new candidate for Sheriff
          Ladies and Gentlemen: Presenting someone you should NOT vote for for Marion County Sheriff (unless he gives all the money Durham "loaned him" back to the victims in Ohio AND agrees to a compete audit by the Indiana State Troopers and a team of Holmes County (Ohio)forensic accountants:

          http://www.flickr.com/photos/atgeist/3900118301/

          Does the concept of honor even exist in Indianapolis anymore?

        • PS
          P.S.

          Happy Thanksgiving, Turkey!
        • Great Youtube video of Durham and the raid
          http://www.youtube.com/watch?v=HbiyGTkxJUs
        • Re
          When you talk about buying cars, are you talking about someone who had to spend some serious money replacing, or repairing (it's hard to remember) a certain Viper that was crashed when a certain politician got drunk and wrecked it?
        • HOLD it now
          Hold your ground Tim!! Carmel loves you!! Stay strong and keep shooting for that big windfall in the sky!! Peace.
        • The Truth Wills Out!
          This will not end well for Tim....looks like the various rumblings about his untowardly dealings will be proven correct!

          Good Call UBB
        • Tims story
          Tim please tell us your story!
        • Tim and Kato Kaelin
          Here is Tim in the red wig--spending tens of thousands of Ohio investor's money on a huge party last month.

          Poor Kato--can't he hang around with non-criminals?

          http://www.politeinpublic.com/event/1287/national-lampoons-haunted-mansion/20091029_PLT07_2336%20copy

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