INDIANAPOLIS — Federal prosecutors who allege Indianapolis businessman Timothy Durham swindled investors out of millions of dollars want to seize his luxury home, 18 bank accounts and other assets.
The Indianapolis Star reported Sunday that prosecutors have filed a 10-page civil complaint in U.S. District Court seeking forfeiture of the assets including Durham’s home on Geist Reservoir northeast of Indianapolis and two other properties in Henry County, east of Indianapolis, and Los Angeles.
The complaint accuses Durham and his associates at Akron, Ohio-based Fair Financial of telling investors their money would be invested in low-risk, high-yield short-term consumer debt.
“Instead, the money provided by victims of the scheme was used to make interest and redemption payments to earlier victims of the scheme, thereby lulling the earlier victims into believing that their money was being (invested) responsibly,” the complaint said.
No criminal charges have been filed against Durham.
Durham’s attorney, John Tompkins of Indianapolis, did not return a phone message Sunday from The Associated Press requesting comment.
Last week, FBI agents raided the offices of Fair Financial and Indianapolis-based Obsidian Enterprises, also run by Durham. Tompkins said then that Durham believed he had done nothing wrong.
The government’s complaint describes a pattern of money flowing back and forth between Fair Financial and numerous other companies run by Durham. Federal Reserve Bank records showed more than 6,000 wire transactions between May 2004 and May 2009 for 21 companies under the control of Durham and his business partner, James Cochran.
The wire transactions also detailed money transfers from Fair Financial to its parent company, Fair Holdings, also controlled by Durham and Cochran. In more than 900 separate wire transactions during the five-year period, Fair Financial sent approximately $84.2 million to the First Indiana Bank account of Fair Holdings, the government filing said.
Fair Holdings then wired money to nearly 50 individuals and businesses, including $6.9 million to U.S. Rubber Reclaiming, an Obsidian subsidiary; $5.3 million to Speedster Inc., a classic car replica manufacturer owned by Durham; $1.8 million to Obsidian’s former parent company, Danzer Industries; and $1 million to Champion Trailer, a former Obsidian subsidiary, said the complaint filed Tuesday.
Durham operated at least two holding companies and 19 operating subsidiaries, with approximately 77 individual bank accounts, the complaint said. As of June 30, the financial statements for Fair Financial showed total assets of about $241 million, with approximately $192 million in loans to Durham and his various businesses.
The statements also show a net operating loss for 2008 of about $1.7 million and net income of $129,845 for the first six months of 2009.
The complaint also accuses Durham of keeping a portion of the investments for his personal use.
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