Major Ponzi Scheme Indictment handed down for Tim Durham of Fair Finance and National Lampoon fame. Choices and Consequences…

March 16, 2011

According to an indictment handed down on March 15, 2011 – Tim Durham, James F. Cochran and Rick D. Snow – all have been charged in what is reported as the largest fraud case in the state of Indiana.  The 23 page Grand Jury indictment alleges that Durham, business partner James F. Cochran and former Fair Chief Financial Officer Rick D. Snow devised and executed a scheme to defraud investors in the Akron, Ohio-based  Fair Finance.  The actual indictment can be seen here:  durham_indictment

The alleged fraud is over $200,000,000 and that, if proven, equals a long time in prison.

All three men are facing felony charges of 10 counts of wire fraud, one count of securities fraud and one count of conspiracy to commit wire fraud and securities fraud.  Each faces a maximum of five years in prison for the conspiracy count, 20 years in prison for each wire fraud count and 20 years in prison for the securities fraud count. In addition, each could be fined $250,000 for each count upon which they are convicted.

Separate civil securities charges were filed by the SEC against the men in federal court.

The indictment alleges that between February 2005 and November 2009, Durham and Cochran directed Fair to loan money to themselves and other insiders “which caused a steady and substantial deterioration in Fair’s financial condition.” The three men then allegedly deceived and defrauded investors through misleading statements about the company’s finances.

Durham and Cochran also “used a significant portion of the proceeds of these loans to maintain their lifestyles and to pay for personal expenses,” which, according to the indictment include:  $250,000 in Fair money in 2007  wired to remodel his garage, another $150,000 the following year to use at a casino and Cochran wired $50,000, also in 2008, to pay country club fees.  This is the tip of the iceberg according to the formal indictment.

FROM A HIGH TO A LOW…

CNBC did a report on Tim Durham sometime back.  Take a look

How high one can fall when life is based on an illusion.  I know…I’ve been there.  For now, Tim and cohorts face an uphill battle.  Rarely does the US Attorney unseal an indictment unless the US Attorney feels that a win is inevitable.  Advice to Tim – cop a plea…otherwise a conviction will result in a far greater sentence than he’d get today.  Further, although I doubt he’d receive it…I think the three could gain some benefit in reading my new book – SECOND CHANCES.  Perhaps one day – just not this day – they will find that they could use their intellect in a well placed endeavor that will help instead of hurt people.

WHAT ARE YOUR THOUGHTS?

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