ILNews

Lampoon: Durham used $1M from company to pay attorney

J.K. Wall
March 4, 2013
Back to TopCommentsE-mailPrintBookmark and Share

A film company once headed by Indianapolis financier Tim Durham says he transferred $1 million to his Indianapolis lawyer, John Tompkins, while fighting federal securities fraud charges.

Durham, the former CEO of National Lampoon, was sentenced in November to 50 years in federal prison on securities fraud and other crimes related to the collapse of Akron, Ohio-based Fair Finance Co.

The lawsuit, filed Thursday in a state court in Los Angeles, where National Lampoon is headquartered, follows a similar allegation made in January by the bankruptcy trustee for Fair Finance.

National Lampoon has also sued Indianapolis attorney John Tompkins, who represented Durham unsuccessfully in the Fair Finance case, and unknown individuals it says helped make the wire transfer possible.

National Lampoon claims that one week after agreeing to a settlement with Warner Bros. over the distribution of the National Lampoon’s "Vacation" series of  movies — a deal that paid National Lampoon $2.7 million — Durham transferred $1 million of that money into the bank account of Tompkins’ Indianapolis law firm, Brown Tompkins Lory & Mastrian.

The lawsuit also claims that Tompkins was listed as the beneficiary of that transfer, which allegedly occurred on July 28, 2011. Durham covered his tracks, the lawsuit alleges, with "false, fraudulent and deceptive entries in the business records of National Lampoon." The company claims it did not discover the $1 million transfer until April 2012.

Durham resigned as CEO of National Lampoon in January 2012 after leading the company for three years.

A call to Tompkins Monday morning was not immediately returned. In January, when Fair Finance trustree Brian Bash claimed that National Lampoon had financed Durham’s defense, Tompkins gave a brief statement to IBJ.

"I don’t think it’s accurate that Lampoon funded his defense,” he said on Jan. 23. “Beyond that, I don’t have anything to say."

Tompkins is no longer representing Durham. Instead, James H. Mutchnik, a white-collar criminal defense attorney at Chicago-based Kirkland & Ellis, has agreed to represent Durham for free during an appeal of his conviction.

Bash has claimed in a lawsuit against National Lampoon that Durham propped up the company by transferring $9 million, over the course of a decade, from investors’ holdings at Fair Finance.

A federal jury in June found Durham guilty on all 12 counts stemming from the collapse of Fair. Prosecutors charged that Durham looted the company to fund a lavish lifestyle and support other failing businesses he owned.

Fair co-owner Jim Cochran, who was convicted on eight of 12 counts, received a 25-year sentence, and Rick Snow, the chief financial officer, received 10 years.

Money for the scheme came from 5,000 Ohio investors who purchased unsecured notes from Fair boasting interest rates as high as 9 percent.

Bash has been trying to recover money for the investors for nearly three years, but so far has been unable to make a distribution.

Bash sued Fair for more than $150 million and wrested a proposed $3.55 million settlement from former owner Donald Fair.

All of IBJ's coverage of Tim Durham and Fair Finance can be found 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
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  2. If the end result is to simply record the spoke word, then perhaps some day digital recording may eventually be the status quo. However, it is a shallow view to believe the professional court reporter's function is to simply report the spoken word and nothing else. There are many aspects to being a professional court reporter, and many aspects involved in producing a professional and accurate transcript. A properly trained professional steno court reporter has achieved a skill set in a field where the average dropout rate in court reporting schools across the nation is 80% due to the difficulty of mastering the necessary skills. To name just a few "extras" that a court reporter with proper training brings into a courtroom or a deposition suite; an understanding of legal procedure, technology specific to the legal profession, and an understanding of what is being said by the attorneys and litigants (which makes a huge difference in the quality of the transcript). As to contracting, or anti-contracting the argument is simple. The court reporter as governed by our ethical standards is to be the independent, unbiased individual in a deposition or courtroom setting. When one has entered into a contract with any party, insurance carrier, etc., then that reporter is no longer unbiased. I have been a court reporter for over 30 years and I echo Mr. Richardson's remarks that I too am here to serve.

  3. A competitive bid process is ethical and appropriate especially when dealing with government agencies and large corporations, but an ethical line is crossed when court reporters in Pittsburgh start charging exorbitant fees on opposing counsel. This fee shifting isn't just financially biased, it undermines the entire justice system, giving advantages to those that can afford litigation the most. It makes no sense.

  4. "a ttention to detail is an asset for all lawyers." Well played, Indiana Lawyer. Well played.

  5. I have a appeals hearing for the renewal of my LPN licenses and I need an attorney, the ones I have spoke to so far want the money up front and I cant afford that. I was wondering if you could help me find one that takes payments or even a pro bono one. I live in Indiana just north of Indianapolis.

ADVERTISEMENT