ILNews

Durham found guilty on all counts

Back to TopCommentsE-mailPrintBookmark and Share

A federal jury found attorney and financier Tim Durham guilty Wednesday on all 12 felony counts stemming from what prosecutors charged was a massive Ponzi scheme that cost investors in Ohio-based Fair Finance more than $200 million.

The jury found Jim Cochran, who co-owned Fair, guilty on eight of 12 felony counts and Rick Snow, the firm's chief financial officer, guilty on five of 12 counts.

U.S. District Judge Jane Magnus-Stinson ordered all three held at the Marion County Jail until a hearing Monday morning, when she will determine whether they should remain detained or be released on home detention until sentencing.

Durham, 49, Cochran, 56, and Snow, 48, were handcuffed and led out of the courtroom by U.S. Marshals, who transported them to jail. The defendants did not exhibit an obvious reaction, though a few family members who had gathered in the courtroom wept.

The defendants each faced the same 12 counts: 10 counts of wire fraud, one count of securities fraud, and one count of conspiracy to commit wire fraud and securities fraud.

After deliberating for about eight hours, the jury found Durham guilty on all counts, while splitting its decision on Cochran and Snow. The pair were found not guilty on three charges involving wire transfers of funds from Fair that wound up in Durham's bank account.

For wire fraud charges involving recorded phone calls, the jury found the two defendants on each particular call guilty. Durham was a participant on every call that resulted in charges.

The jury found all three defendants guilty of securities fraud, conspiracy to commit wire and securities fraud and two counts of wire fraud involving the dissemination of an offering circular for investors in Fair Finance.

Assistant U.S. Attorney Winfield Ong urged the defendants be taken into custody, telling the judge they are flight risks. The defense attorneys argued their clients should be released back to home detention pending sentencing.

"Tens of millions of dollars are missing," Ong told the judge. "All of them are facing life sentences. All it takes is $2,000 to get across the border."

The judge said she would make the decision after hearing evidence on the question at 10 a.m. Monday.

U.S. Attorney Joseph Hogsett hailed the jury's decision, calling the case "the most significant piece of litigation the Southern District has seen in a generation."

The verdict was a huge victory for Hogsett's office and the FBI, which began investigating Durham more than three years ago.

Hogsett vowed to seek the "full and maximum penalties." He said that makes it "entirely likely (the defendants) will serve the rest of their lives in jail."

Each wire fraud charge can carry a prison sentence of up to 20 years; the punishment on the securities fraud charge would take into account the number of investors who lost money and how much they lost.

Sentencing will occur in the next few months. At that hearing, defendants would have the opportunity to call character witnesses.

Durham defense attorney John Tompkins declined to comment as he left the courtroom Wednesday.

David Spector, an Ohio businessman who lost about $200,000 in Fair and testified for the prosecution, expressed gratitude when reached by phone Wednesday evening.

"I think the jury heard all the evidence, and it's pretty clear from the short deliberation and the verdict that the evidence was overwhelming," said Spector, who lives in Wooster, Ohio. "It sounds to me like the system worked."

Brady Cassidy, a 68-year-old Wooster resident who lost $90,000, added: "It doesn't put a dime in our pocket. But justice is served, and that's great. I'll have a good evening."

The judge read the verdicts starting at about 6:25 p.m. Wednesday.

Attorneys for the prosecution and defense offered their closing arguments Tuesday afternoon, a few hours after defense attorneys for the three defendants rested their cases. The jury began its deliberations at 9:50 a.m. Wednesday. The trial began June 11 in U.S. District Court after jury selection on June 8.

The U.S. Attorney's Office offered six days of testimony, thousands of pages of documents and recordings from FBI wiretaps as it tried to convince jurors the defendants ran Ohio-based Fair Finance as a Ponzi scheme, defrauding more than 5,000 investors.

Prosecutors said the defendants gutted Fair Finance by doling out tens of millions of dollars in related-party loans to Durham, Cochran, their friends and their failing businesses. Those loans were never repaid.

Defense attorneys blamed the 2009 collapse of the consumer-loan company on a "perfect storm" of a bad economy, bad press and newly skeptical Ohio regulators. Defense presentations lasted less than two hours and did not include testimony from Durham or his co-defendants.

On June 1, the Indiana Supreme Court suspended Durham for not paying his annual registration fee. He was admitted to the Indiana bar in 1987 and does not have a history of discipline, according to the Indiana Roll of Attorneys. The suspension is to begin June 22.

To catch up on the Indianapolis Business Journal's coverage of Fair Finance and Tim Durham, click here.


 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

ADVERTISEMENT