Timothy Shawn Durham Sr. (born 1962) is an American former

lawyer A lawyer is a person who practices law. The role of a lawyer varies greatly across different legal jurisdictions. A lawyer can be classified as an advocate, attorney, barrister, canon lawyer, civil law notary, counsel, counselor, solic ...

and businessman convicted in 2012 of the largest

corporate fraud In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals acting on behalf of a corpo ...

ever investigated by the

FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...

Indiana Indiana () is a U.S. state in the Midwestern United States. It is the 38th-largest by area and the 17th-most populous of the 50 States. Its capital and largest city is Indianapolis. Indiana was admitted to the United States as the 19th s ...

. His

investment firm An investment company is a financial institution principally engaged in holding, managing and investing securities. These companies in the United States are regulated by the U.S. Securities and Exchange Commission and must be registered under t ...

Obsidian Enterprises invested in a number of companies, including wireless device company BrightPoint and comedy brand National Lampoon, Inc., where Durham served as CEO.Mackinnon, Jim (February 18, 2011)
Lawsuit says Fair Finance owner Timothy Durham 'looted' investment company.
''

Akron Beacon Journal The ''Akron Beacon Journal'' is a morning newspaper in Akron, Ohio, United States. Owned by Gannett, it is the sole daily newspaper in Akron and is distributed throughout Northeast Ohio. The paper's coverage focuses on local news. The Beacon J ...

'' In 2012, Durham was sentenced to 50 years in prison in connection with a

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...

that defrauded 5,400 investors, many of them elderly, of approximately $216 million, according to the

U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

Early life and education

Durham grew up in

Seymour, Indiana Seymour is a city in Jackson County, Indiana, United States. Its population was 21,569 at the 2020 census. The city is noted for its location at the intersection of two major north–south and east–west railroads, which cross each other in th ...

. He graduated from

Indiana University Indiana University (IU) is a system of public universities in the U.S. state of Indiana. Campuses Indiana University has two core campuses, five regional campuses, and two regional centers under the administration of IUPUI. *Indiana Universit ...

and its law school.

Career

Businesses and Obsidian

He worked for law firm Ice Miller after graduation, and in 1989 he married Joan SerVaas. Durham soon joined the investment firm owned by his wife's father,

Indianapolis Indianapolis (), colloquially known as Indy, is the state capital and most populous city of the U.S. state of Indiana and the seat of Marion County. According to the U.S. Census Bureau, the consolidated population of Indianapolis and Marion ...

financier and longtime city council president

Beurt SerVaas Beurt SerVaas (May 7, 1919 - February 2, 2014) was an American businessman, publisher, and politician. He served as a US Naval Officer in China during World War II, after being recruited by Office of Strategic Services (OSS, now known as the CIA). ...

. Durham left the firm after his 1998 divorce. Durham was involved in taking over numerous ailing companies, including school bus manufacturer Carpenter, cargo trailer makers Danzer Industries and United Expressline, U.S. Rubber Reclaiming, and bus leasing firm Pyramid Coach. In 2001, he took his company Obsidian public. The public company then invested in a range of companies, including a rally-car builder, a

plastic surgery Plastic surgery is a surgical specialty involving the restoration, reconstruction or alteration of the human body. It can be divided into two main categories: reconstructive surgery and cosmetic surgery. Reconstructive surgery includes craniofa ...

center, a car magazine, a tour bus operator, a limousine rental company, a nightclub, an Italian restaurant, and a cell-phone billing processor. Obsidian also invested in mobile device distributor BrightPoint and National Lampoon, Incorporated. From 2001 to 2006, Obsidian had cumulative losses of $30 million, according to the bankruptcy trustee. During that time Obsidian was borrowing heavily from Fair Finance Company, an

Akron, Ohio Akron () is the fifth-largest city in the U.S. state of Ohio and is the county seat of Summit County, Ohio, Summit County. It is located on the western edge of the Glaciated Allegheny Plateau, about south of downtown Cleveland. As of the 2020 C ...

-based creditor. Durham and accomplice James Cochran had acquired Fair Finance through a holding company in 2002. Durham appointed Dan Laikin as CEO of National Lampoon Inc. The SEC alleged Laikin conspired to inflate the company's stock price to $5 in order to prevent the company from being delisted from the

American Stock Exchange NYSE American, formerly known as the American Stock Exchange (AMEX), and more recently as NYSE MKT, is an American stock exchange situated in New York City. AMEX was previously a mutual organization, owned by its members. Until 1953, it was known ...

.Irwin, Mary Jane (December 19, 2008)
Lampooned By Its Own Petard.
''

Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also re ...

'' Laikin alerted authorities to Durham's financial schemes in hopes of getting a reduced sentence. Durham took over as Lampoon CEO after Laikin stepped down.

Raid and arrest

The offices of Obsidian and Fair Finance were raided by federal agents in 2009, suspected of involvement in a

. Durham was arrested in 2011.Blankstein, Andrew (March 16, 2011)
National Lampoon chief arrested in alleged $200-million Ponzi scheme.
''

Los Angeles Times The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the Un ...

'' On June 20, 2012; an Indianapolis jury convicted Durham of 10 counts of

wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical or electronic mail system to fraud, defraud another, and are Federal crime in the United States, federal crimes there. Jurisdiction is claimed by the ...

, one count of

securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in los ...

, and one count of conspiracy to defraud. On November 30, 2012; he was sentenced to 50 years in prison–at his age, effectively a life sentence.Harris, Andrew
Ex-National Lampoon CEO Tim Durham Gets 50 Years Prison

Bloomberg News Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg Televi ...

, 2012-11-30. While he faced a maximum of 225 years under sentencing guidelines, federal district judge Jane Magnus-Stinson said there was no point in handing down a sentence that long.Ritchie, Carrie (November 30, 2012)
Judge sentences Tim Durham to 50 years in prison for defrauding investors
''

Indianapolis Star Indianapolis (), colloquially known as Indy, is the state capital and most populous city of the U.S. state of Indiana and the seat of Marion County. According to the U.S. Census Bureau, the consolidated population of Indianapolis and Marion ...

'' Nonetheless,

Joe Hogsett Joseph Hadden Hogsett (born November 2, 1956) is an American attorney, prosecutor, and politician who is the 49th mayor of Indianapolis, Indiana. Prior to being elected, Hogsett served as the Secretary of State of Indiana from 1989 to 1994 and as ...

, the U.S. Attorney for the Southern District of Indiana, called it the longest sentence ever imposed for a white-collar offense in Indiana history. On September 4, 2014, a federal appeals court overturned two of 10 wire fraud counts against Durham and ordered a new sentencing hearing, saying prosecutors failed to enter some key evidence into the trial record. On June 26, 2015, Durham had his 50-year sentence reinstated. Magnus-Stinson said that "the huge number of victims and the amount of devastation" left little reason to reduce the original sentence. He is serving his sentence at

United States Penitentiary, McCreary The United States Penitentiary, McCreary (USP McCreary) is a high-security United States federal prison for male inmates in unincorporated McCreary County, Kentucky. It is operated by the Federal Bureau of Prisons, a division of the United States D ...

McCreary County, Kentucky McCreary County is a county located in the U.S. state of Kentucky. Its county seat is Whitley City. The county is named for James B. McCreary, a Confederate war soldier and two-time Governor of Kentucky (1875–1879, 1911–1915). During his s ...

. He was also sentenced to two years' supervised release, but this was largely academic given the likelihood that he will die in prison. His earliest possible release will be February 1, 2056, when he will be 94 years old. Fair Finance Co. trustee Brian Bash alleged in a lawsuit filed in 2012 that Durham's mother, Mitza Durham, received more than $831,000 in "fraudulent transfers" from her son between 2006 and 2009 that needed to be repaid to the company estate. In 2014, Mitza Durham agreed to repay Fair Finance Co. $500,000, plus interest. In 2016, Durham was

disbarred Disbarment, also known as striking off, is the removal of a lawyer from a bar association or the practice of law, thus revoking their law license or admission to practice law. Disbarment is usually a punishment for unethical or criminal conduct ...

by the Indiana Supreme Court.

Political activism

According to ''

Businessweek ''Bloomberg Businessweek'', previously known as ''BusinessWeek'', is an American weekly business magazine published fifty times a year. Since 2009, the magazine is owned by New York City-based Bloomberg L.P. The magazine debuted in New York City ...

'', Durham was a prominent

Republican Republican can refer to: Political ideology * An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law. ** Republicanism, the ideology in support of republics or agains ...

fundraiser. He served on the steering committee for

Mitch Daniels Mitchell Elias Daniels Jr. (born April 7, 1949) is an American academic administrator, businessman, author, and retired politician. A Republican, Daniels served as the 49th governor of Indiana from 2005 to 2013. Since 2013, Daniels has been pr ...

' successful gubernatorial bid in 2004 and headed the Indiana fundraising effort for

Rudy Giuliani Rudolph William Louis Giuliani (, ; born May 28, 1944) is an American politician and lawyer who served as the 107th Mayor of New York City from 1994 to 2001. He previously served as the United States Associate Attorney General from 1981 to 198 ...

's 2008 presidential campaign.

Documentary

Durham's exploits are featured in the episode "Playboy of Indiana" on the television series

American Greed ''American Greed'' (also known as ''American Greed: Scams, Scoundrels and Scandals'' and as ''American Greed: Scams, Schemes and Broken Dreams'') is an American documentary television series on CNBC. The series focuses on cases of Ponzi schemes, ...

References

External links

Fair Finance Company liquidation siteU.S. v. Durham, 11-cr-00042, U.S. District Court, Southern District of Indiana (Indianapolis)
{{DEFAULTSORT:Durham, Timothy Living people 1962 births American people convicted of fraud Indiana University alumni Pyramid and Ponzi schemes