Corporate & Securities Law

Tim Durham Caught In Ponzi Scheme Probe

By Keith Griffin

Tim Durham?s name used to be associated with a lavish lifestyle that entailed a 30,000-square-foot mansion and an eclectic collection of exotic and classic cars. Now, it?s a Ponzi scheme being linked to the flamboyant businessman.

Durham is the subject of a federal investigation for running an alleged Ponzi scheme through his company, Fair Finance, which advertised and sold supposedly safe, but high-yielding, investment certificates to Ohio investors, many of whom were elderly. Money from the investors was then filtered to other companies that Durham owns or controls, according to court documents. 

Last month, the FBI raided Durham?s businesses, Fair Finance and Obsidian Enterprises. On the same day, Nov. 24, that the raids occurred, the U.S. attorney?s office in Indianapolis filed court documents accusing Durham and at least some of his companies of defrauding investors out of hundreds of millions of dollars. 

To date, no criminal charges have been filed against Durham. However, Durham did just recently hire James Voyles, a top Indianapolis criminal defense attorney.

On Dec. 4, Maddox Hargett & Caruso P.C. and David P. Meyer & Associates filed a lawsuit against Durham on behalf of an Akron couple who invested in Fair Finance. The lawsuit, which is seeking class action status, contends that Durham and James Cochran, co-owner of Fair Finance, used the company ?as their own personal bank.?

?A lot of people are just scared to death that they have lost their entire life savings,? said David Meyer of David P. Meyer & Associates in a Dec. 21 article in the Wall Street Journal.

A second lawsuit was filed against Durham on Dec. 21 on behalf of 36 Wooster, Ohio, investors who say Durham owes them $2.2 million. Many of the plaintiffs in that lawsuit are believed to be members of the Amish community. 

Following the FBI?s raids of Nov. 24, the nine offices of Fair Finance have remained closed. The company owes approximately $200 million to Ohio investors who purchased the investment certificates, which do not have a government guarantee. 

In an interview with the Wall Street Journal, Durham, 47, said he was ?shocked? by the raids on his businesses and that the allegations against him were ?untrue.?

Full post as published by Representing Investors on December 24, 2009 (boomark / email).