The federal government has filed court papers alleging Indianapolis businessman Tim Durham committed wire fraud and seeking
forfeiture of his property, including his 30,000-square-foot Geist mansion, a home in Los Angeles and his 2008 Bugatti sports
The civil forfeiture action was quietly filed in federal court in Indianapolis on Nov. 24—the same day the FBI executed search warrants at Durham’s principal office on the top floor of Chase Tower and at the offices of Akron, Ohio-based Fair Finance Co.
In the complaint, the U.S. Attorney’s Office for the Southern District of Indiana alleges Durham, his associates and his companies committed fraud by telling prospective purchasers of Fair Finance investment certificates that the money would go toward purchasing low-risk consumer loans.
In fact, court papers allege, the money went to, in effect, carry out a Ponzi scheme, using money from new investors to pay what it owed prior investors, thereby “lulling the earlier victims into believing that their money was being [handled] responsibily.”
The complaint says tens of millions of dollars in Fair Finance funds went to nearly two dozen companies controlled by Durham and Jim Cochran, Fair’s co-owners, as well as to various individuals.
The suit seeks forfeiture of funds held in numerous Durham-controlled bank and investment accounts, in addition to homes and other assets.
John Tompkins, an attorney representing the 47-year-old Durham, was not immediately available for comment.
The forfeiture filing and FBI raids came a month after IBJ published an investigative story questioning whether Fair, which purchases customer-finance contracts from retailers and other firms, had the financial wherewithal to repay Ohio investors who had purchased $197 million in investment certificates.
The story reported that, since Durham bought the business from Donald 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 owed Fair more than $168 million.