INDIANAPOLIS — An Indianapolis businessman accused of looting an Ohio-based finance company after buying it and bilking about 5,000 mostly elderly investors out of more than $200 million was convicted Wednesday on all counts.
A federal jury found Tim Durham guilty of securities fraud, conspiracy and 10 counts of wire fraud. His business partners, James F. Cochran and accountant Rick D. Snow, also were convicted of conspiracy and securities fraud, and some wire fraud counts.
All three men were taken into custody pending a hearing Monday. Jurors began deliberations Wednesday morning after the judge denied a request from Durham's attorney for a mistrial.
Prosecutors claimed that after buying Akron, Ohio-based Fair Finance in 2002, Durham and his partners stripped it of its assets and tapped it to buy luxury items such as classic cars, houses and casino trips. The men also were accused of funneling funds from Fair Finance to Durham's Indianapolis-based holding company, Obsidian Enterprises, to keep its failing subsidiaries intact.
Prosecutors claimed the men operated an elaborate Ponzi scheme to hide Fair Finance's depleted condition from investors and regulators until the FBI raided Durham's office in November 2009. By then, the consumer finance company founded in 1934 was $200 million in debt.
Durham's attorney, John Tompkins, had argued that Durham and the others were caught off-guard by the economic crisis of 2008, and bewildered when regulators placed them under more strict scrutiny and investors made a run on the company. He argued that the evidence didn't support the accusation of fraud because Durham stood to lose money if Fair Finance went under, claiming that Durham had sunk millions of dollars of his own money into Obsidian to keep it afloat.
All three men were found guilty of conspiracy and securities fraud. Each also faced 10 counts of wire fraud; Cochran was convicted on six of those counts and Snow on three.
A federal grand jury in Indianapolis indicted Durham, Cochran and Snow in March 2010. The allegations against Durham — a major Indiana Republican Party donor — led several GOP politicians, including Indiana Gov. Mitch Daniels, to return hundreds of thousands of dollars in campaign contributions sought by Fair Finance's bankruptcy trustee.