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Judge rules for National Lampoon, against fraudster Durham

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National Lampoon will have to get in line with other victims who are owed millions after Indianapolis Ponzi scheme mastermind Tim Durham’s looted of more than $208 million from investors in Ohio-based Fair Finance Co. Any recovery by the comedy conglomerate following a Monday court ruling is likely to assist Fair Finance victims.

Federal Judge Richard L. Young rejected Durham’s “puzzling” argument from prison for reimbursement of loans and advances he made to National Lampoon Inc. Young’s order also rejected Durham’s claims to company stock and fully granted National Lampoon’s motion for summary judgment. The assets of National Lampoon, which Durham owned before his scheme unraveled, remain at issue in the ongoing bankruptcy proceedings involving Fair Finance.

Before Durham’s fraud was discovered – which led to a 2012 conviction and sentence of 50 years in prison over the collapse of Fair Finance — he also had been CEO of National Lampoon since late 2008. Fair Finance bankruptcy trustee Brian A. Bash sued National Lampoon in 2011, seeking to recover more than $9 million in allegedly fraudulent transfers Durham and others made to the company from Fair Finance and other investments. National Lampoon agreed in 2015 to settle the trustee’s suit for $3 million, part of more than $136 million in judgments Bash has secured for in the bankruptcy case since Durham was imprisoned.

Durham was accused of embezzling from a settlement National Lampoon received in a compensation lawsuit regarding the “Vacation” series of films, likely National Lampoon’s most valuable assets. Warner Brothers settled claims over distribution, accounting methods and other disputes, agreeing to pay National Lampoon at least $2.7 million.  

National Lampoon accused Durham of making an unauthorized transfer of $1 million from that settlement to Indianapolis attorney John Tompkins’ checking account at law firm Brown Tompkins Lory & Mastrian, which represented Durham in his criminal case.  The firm also had been named in National Lampoon’s suit but has settled, Young noted. The judge also rejected Durham’s defense to the allegation that this transfer was embezzlement.

“Rather than argue the merits with citation to legal authority, Durham states that embezzlement connotes ‘secretive or clandestine actions.’ His actions, he argues, were not secretive nor clandestine because the alleged embezzlement occurred while he was CEO. Durham’s response is puzzling,” Young wrote in ruling for National Lampoon on its embezzlement count against Durham. “Indeed, it was his position as CEO which gave him the ability to control National Lampoon’s settlement proceeds and to authorize the disbursal of $1,000,000 into Mr. Tompkins’ law firm account.”

This conclusion led Young to rule in favor of National Lampoon on its related claims — breach of fiduciary trust, conversion, fraudulent conveyance and unjust enrichment.

Bash and attorneys representing National Lampoon did not immediately reply to messages seeking comment Wednesday. The case is National Lampoon v. Tim Durham, et al., 1:13-cv-1094.
 

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  1. He TIL team,please zap this comment too since it was merely marking a scammer and not reflecting on the story. Thanks, happy Monday, keep up the fine work.

  2. You just need my social security number sent to your Gmail account to process then loan, right? Beware scammers indeed.

  3. The appellate court just said doctors can be sued for reporting child abuse. The most dangerous form of child abuse with the highest mortality rate of any form of child abuse (between 6% and 9% according to the below listed studies). Now doctors will be far less likely to report this form of dangerous child abuse in Indiana. If you want to know what this is, google the names Lacey Spears, Julie Conley (and look at what happened when uninformed judges returned that child against medical advice), Hope Ybarra, and Dixie Blanchard. Here is some really good reporting on what this allegation was: http://media.star-telegram.com/Munchausenmoms/ Here are the two research papers: http://www.sciencedirect.com/science/article/pii/0145213487900810 http://www.sciencedirect.com/science/article/pii/S0145213403000309 25% of sibling are dead in that second study. 25%!!! Unbelievable ruling. Chilling. Wrong.

  4. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  5. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.

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