Tim Durham will likely spend the rest of his life behind bars after a federal judge on Friday sentenced the disgraced playboy and businessman to a 50-year prison term for defrauding Ohio investors of $250 million.
U.S. Judge Jane Magnus-Stinson said three words describe both Durham, 50, and the crimes he committed: "Deceit. Greed. Arrogance."
The prosecution had sought a sentence of 225 years, taking into account 5,122 victims and a loss amount of $250 million, to punish Durham for operating Akron, Ohio-based Fair Finance as a Ponzi scheme. The judge agreed with the loss calculations but gave Durham a shorter sentence that will allow him to serve time concurrently on some of his 12 convictions.
"This case was all about numbers that were puffed up to create appearances," Magnus-Stinson said before announcing the sentence. "I’m not going to play that game. Mr. Durham is 50 years old."
Later Friday, the judge sentenced Indianapolis businessman Jim Cochran, 57, who co-owned Fair Finance with Durham, to 25 years in prison. Fair Finance CFO Rick Snow, 49, got 10 years.
Before Magnus-Stinson handed down Durham's sentence, he stood and gave a brief statement in the courtroom.
“I feel terrible that they all lost money,” he said, his voice somber. “My family has lost all of its investments.”
Durham said he read many of the letters from victims and regrets that the company failed. He also spoke up in defense of his co-defendants. But he did not offer an apology.
“I’m not blind to how everybody has suffered,” Durham said. “I probably wasn’t as familiar with our investor base as I am now. I have regrets. I wish I would have tried harder to make some things clearer.”
Durham attorney John Tompkins said he plans to appeal the sentence within a 14-day limit.
“Anything that is likely to result in dying in prison can’t be described as a good result,” he said outside the courtroom. “But it clearly was better than a lot of what was available to (the judge).”
Unlike state prisoners, federal inmates must serve 85 percent of their sentences. Durham would have to live to 93 to survive his sentence.
The rulings follow a morning of legal arguments over sentencing and emotional testimony from four victims of the scheme, including a 42-year-old woman named Kristen Schroeder who called herself "one of the lucky victims" since she still has time to save up and recover.
But the last word came from Barbara Lukacik, a 74-year-old nun who lost her life savings of $125,000.
"What has happened is shameful," she said. "Yes, the economy was weak, but that didn’t give you the right to steal not only my money but all the victims of Fair Financial to use as you wish, for serious greed and pampering. And you say you haven’t hurt anyone; let’s be real. I honestly believe justice must be served because it’s the righteous thing to do."
As she wrapped up her testimony, Lukacik turned toward Durham and said, "Shame on you."
After the sentencing, Lukacik would not say whether she considered the 50-year sentence appropriate.
“I was never for hurting him," she said. "I forgive him. I was for justice to be served.”
She was disappointed he didn't seem sorry: “If he had said he was sorry, that would have meant something.”
U.S. Attorney Joseph Hogsett called Durham's 50-year sentence "a significant price that he deserves."
"There are no winners today," Hogsett said outside the courthouse after Durham heard his sentence. "What Tim Durham and his associates destroyed through self-indulgence was irreplaceable, and [the victims] may never be made whole." (For more of Hogsett's comments, see video below.)
In arguing for a maximum sentence for Durham, Assistant U.S. Attorney Winfield Ong quoted from Dante’s Inferno, noting that “fraudsters” like Durham are more dangerous to society than street thugs or drug dealers.
But Tompkins pleaded for leniency arguing a federal investigation into Fair Finance and negative media attention made it difficult to recover the company’s legitimate assets.
He bristled at comparisons to the Bernie Madoff’s Ponzi scheme, arguing that Fair held legitimate businesses that struggled in a bad economy.
The sentencing comes three years after FBI agents raided Fair Finance and Obsidian Enterprises, a Durham company located on the 48th floor of Chase Tower in Indianapolis.
A federal jury in June found Durham guilty on all 12 felony fraud charges stemming from the collapse of Fair. Durham co-owned the firm with Jim Cochran, who was convicted of eight of 12 felony charges. Rick Snow, the company’s chief financial officer, was convicted on five of 12 counts.
The government had recommended a 225-year prison sentence for Durham, 145 years for Cochran, and 85 years for Snow. All three men are expected to appeal.
For live updates from the Durham sentencing hearing, click here.
All of IBJ's coverage of Tim Durham and Fair Finance is here.
This story will be updated.