Court upholds most counts against ex-financier

AP News
Posted: Sep 04, 2014 7:48 PM

CHICAGO (AP) — A U.S. appeals court on Thursday upheld 10 convictions against an Indianapolis financier but overturned two wire fraud counts, saying the government failed to enter into the record key documentary evidence.

Timothy Durham and co-defendants Jim Cochran and Rick Snow were convicted in 2012 of swindling thousands of investors out of $200 million. Durham was convicted on 12 counts and sentenced to 50 years; Cochran was convicted on eight counts and sentenced to 25 years; Snow was convicted on five counts and sentenced to 10 years.

The 7th Circuit Court of Appeals in Chicago rejected most of the appeals but overturned two involving the transfer of $250,000 and $50,000.

The appeals court said the government's failure to enter the documentary evidence "was clearly an oversight, but the mistakes leaves a crucial gap in the evidence in those counts." It said the government used single-page printouts to establish the wire transfers were made in furtherance of the fraudulent scheme.

"At most, this evidence shows that the wire transfers were in fact made; it does not establish the transfers were made in furtherance of the fraudulent scheme," the court said in a 31-page decision.

The court ordered the lower court to resentence Durham without those two counts.

The court ruled the three took control of Akron, Ohio-based Fair Finance and turned it into "their personal piggy bank."

"They used money invested in Fair to support their lavish lifestyles and to fund loans to related parties that would never be repaid. When the company's auditors raised red flags about its financial status, the auditors were fired," the court wrote.

The court said the scheme began to unravel and one of the company's directors under a separate investigation alerted the FBI that Fair Finance was being operated as a Ponzi scheme. Fair Finance was a respectable company before Durham and Cochran bought the business in 2001 through a holding company, the court wrote.

Neither Durham's attorney nor Snow's attorney immediately returned messages seeking comment. Cochran's attorney, Michelle Jacobs, declined to comment.