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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. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

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