The Herald Bulletin on June 19, 2012 released the following:
INDIANAPOLIS — Federal prosecutors wrapped up their case Monday against a prominent Indianapolis businessman who they say bilked investors out of $200 million, much of it life savings.
For the past week, prosecutors have presented evidence against Tim Durham, business partner James F. Cochran and accountant Rick D. Snow. The men are accused of raiding the Akron, Ohio-based Fair Finance Co. and allegedly used a Ponzi scheme to steal the savings from about 5,000 mostly elderly investors. They are charged with 12 felony counts of wire fraud, securities fraud and conspiracy to commit wire and securities fraud.
One of them, Donald Russell of Doylestown, Ohio, testified that he lost $350,000, and his 82-year-old mother lost $125,000 and died a month later. He said he believes the stress of losing her life savings pushed her over the edge.
“They have no hearts or souls,” Russell said of Durham and his partners.
Defense attorney John Tompkins said Durham is innocent, but told The Indianapolis Star that he feels sorry for Russell.
“I don’t think that there are any words that could begin to address the situation that he faces,” Tompkins said. “He had a horrible circumstance, and words cannot console him.”
Prosecutors presented analyses of forensic accountants that showed money from Fair Finance being used to help pay for an expensive Playboy party, Durham’s classic cars and trips to luxury resorts and casinos.
Donald Fair, who sold his company to Durham and Cochran in 2002, testified that the men loaned investors’ money to themselves and their businesses and never repaid it.
Prosecutors played recorded phone calls in which Durham and Cochran allegedly made up excuses to give investors about why their interest checks had stopped and they couldn’t cash in. The men tried to persuade Ohio regulators to allow them to sell another $250 million in investment certificates, prosecutors said, and took cash deposits from investors to whom they promised to issue more investment certificates later.
Cochran doubted regulators would shut down the company, according to recordings played in court.
“If they’re gonna blow us up, we’re gonna blow them up,” Cochran allegedly said in a phone call with Durham on Nov. 13, 2009. “I mean nobody wins and everybody loses, but we lose the worst. … I mean it would be a catastrophic event in the state of Ohio. And I’m sure they don’t want that kind of headline.”
Prosecutors presented emails and recordings in which the men discussed layoffs, selling off assets and other ways to cut costs or conceal the loans, yet Cochran also asked to raise his salary to $1 million a year.
In the weeks before an FBI raid shut down Fair Finance in November 2009, prosecutors said Monday, Durham and his partners transferred $85 million from the parent company, DC Investments, to Fair’s books to show more assets on the company’s balance sheet, the Indianapolis Business Journal reported.
Defense attorneys are expected to present their case Tuesday morning, and closing arguments are scheduled for Tuesday afternoon. Jury deliberations are expected to begin Wednesday.
Attorneys for Cochran and Snow have declined to talk about the trial, and Tompkins refused to discuss his defense strategy. He said he didn’t know if Durham would testify in his own defense.
“That will be his decision, but I will advise him,” Tompkins said. “We haven’t had our discussion.””
Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:
To find additional federal criminal news, please read Federal Criminal Defense Daily.
Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.
The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at email@example.com or at one of the offices listed above.