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Judge rejects Durham motion to throw out indictment

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A federal judge on Thursday rejected Indianapolis financier Tim Durham’s months-long quest to have his indictment dismissed on the grounds that the government used wiretaps before it had court authorization to do so.

The ruling by U.S. Judge Jane Magnus-Stinson is a big setback for Durham and his attorney, John Tompkins, who in court papers had alleged “outrageous government misconduct.” Tompkins had sought dismissal, or at least a court order suppressing all the wiretap evidence the government obtained.

Magnus-Stinson dispatched Tomkins’ arguments in a six-page order. She said this federal circuit does not recognize a doctrine of outrageous government conduct. So, she said, that would not be grounds for dismissal even if proven.

And she seemed untroubled by FBI testing of the wiretap on Nov. 2 — four days before a federal court authorized tapping of Durham’s cell phone.

“Given that Mr. Durham has been unable to marshal any case authority for his claim that merely testing software in anticipation of obtaining judicial authorization violates the statute, the court finds the … testing here — conducted on FBI lines with only an FBI technician speaking — falls within the express authorization that Congress provided the wire-tapping statute,” Magnus-Stinson wrote.

“FBI technicians can conduct as many audio tests using their own phone calls as they wish.”

Federal prosecutors have used the wiretaps to help build a case that Durham, owner of Akron, Ohio-based Fair Finance Co., was operating the business as a Ponzi scheme.

FBI agents raided Durham’s office atop Chase Tower in Indianapolis and Fair’s Akron headquarters in late November 2009, about a month after the wiretapping began. Fair Finance never reopened.

A grand jury in March 2011 indicted Durham, Jim Cochran and Rick Snow on charges of conspiracy to commit wire and securities fraud, wire fraud and securities fraud.

Durham and Cochran co-owned Fair Finance, while Snow was chief financial officer.

Prosecutors say that after buying Fair in 2002, Durham and Cochran raided its coffers to fund a lavish lifestyle as well as a host of money-losing businesses they controlled.

Authorities say Durham and Cochran pulled money out with such abandon that they left Fair without the means to repay Ohio investors who had purchased unsecured investment certificates from the company. More than 5,200 investors are owed more than $230 million.

Snow is accused of participating in the fraud, but unlike Durham and Cochran he isn’t accused of taking out millions of dollars in insider loans he lacked the means to repay.

Durham, Cochran and Snow deny wrongdoing. They’re all scheduled to stand trial in June.

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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