INDIANAPOLIS — An Indiana financier and former chief executive of Akron-based Fair Finance Corp. was sentenced Friday to 50 years in prison after being convicted of swindling thousands of investors — almost all from Northeast Ohio — out of more than $200 million.
In handing down the sentence, U.S. District Judge Jane Magnus-Stinson told Timothy Durham that his “deceit, greed and arrogance” had cost many of his victims their life savings and dreams of a comfortable retirement.
Durham, who was led into the courtroom in handcuffs and leg chains and wearing a gray-green prison jumpsuit, had no visible reaction when the judge pronounced his sentence.
The 50-year-old rocked briefly in his chair afterward and fidgeted with a pen he held with his both his hands, quietly telling Magnus-Stinson “No, your honor” when she asked if he had any questions about his sentence.
But he appeared dazed as he was handcuffed and led from the room into the custody of the U.S. Marshals Service.
James Cochran, an associate of Durham, was sentenced Friday to 25 years in prison, while accountant Rick Snow received a 10-year sentence. Both Durham and Cochran were taken away in handcuffs to serve their sentences, but Snow was allowed to leave with his family, pending a determination on where he will serve his sentence.
An Indianapolis jury in June found the three men guilty of securities fraud and conspiracy. It also convicted Durham, a major Indiana Republican Party donor who resigned his post at National Lampoon in January, of 10 counts of wire fraud, while Cochran and Snow were convicted on some of those counts.
Prosecutors have said the three stripped Akron-based Fair Finance of its assets and used the money to buy mansions, classic cars and other luxury items and to keep another of Durham’s company afloat. The men were convicted of operating an elaborate Ponzi scheme to hide the company’s depleted condition from regulators and investors, many of whom were elderly.
The judge said Durham had violated the trust of thousands of small investors from the American heartland who had been careful with their money and invested it with him in hopes of traveling in their retirement, paying off their mortgages and perhaps buying a small home in Florida.
Fair Finance had more than 5,200 investors who were owed nearly $209 million when the company was shut down by federal officials, according to bankruptcy court records.
Almost all were from the Northeast Ohio area, including at least 2,169 from Summit County who invested $86.2 million; 1,358 from Wayne County, $51.4 million; and 559 from Medina County, $23.8 million.
The average individual investment was nearly $40,000.
She said Durham had plundered their money so he could live a luxurious lifestyle.
“When they’re defrauded, it is the most serious offense because it undermines the fabric of this country,” the judge said.
Durham’s attorney, John Tompkins, argued at trial 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.
Attorneys for all three men had asked the judge for lighter sentences than those recommended. Prosecutors had wanted 225 years for Durham, and Tompkins sought a total of five years — three years in prison and two years of home detention.
Magnus-Stinson said she couldn’t give Durham the maximum sentence because it would be as “puffed up” as statements that he held $280 million in assets. But she clearly showed her displeasure with Durham, telling him he had been “raised better” and noting that though he testified that he “felt terribly” for the victims, he had shown no sincere remorse.
Magnus-Stinson said she was unmoved by testimony about Durham’s generosity over the years, including giving to charities and also to political campaigns.
“It’s very easy to be generous if you’re using someone else’s money — and that’s what was happening here,” she said.
The judge also said that she was affected by many of the letters of Durham’s victims, some of whom wrote at length of their financial plight and recommended severe sentences.
“There are some who suggest sentences that might have been imposed in medieval times, that I won’t mention here,” Magnus-Stinson said, drawing muted laughter from some of the victims in the courtroom.
Barbara Lukacik, 74, an Ohio nun who said she lost $125,000 in the Fair Finance collapse, said she had forgiven Durham and the others but testified before the sentencing that a lengthy sentence was warranted.
“If you receive a short sentence — a slap on the wrist, so to say — I do not think it will be enough time for your heart and your conscience to realize your sin and your greed,” she said.
The charges against Durham 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.