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Durham gets 50 years for fraud scheme

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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. 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."

The judge is scheduled later Friday afternoon to sentence Durham's two accomplices in the operation of Akron, Ohio-based Fair Finance as a Ponzi scheme.

Before Magnus-Stinson handed down the sentence, Durham 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.

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.”

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. Cochran was sentenced to 25 years. All three men are expected to appeal.

All of IBJ's coverage of Tim Durham and Fair Finance is here. The IBJ is a sister publication of Indiana Lawyer.
 

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  1. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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