The FBI’s raid on Tim Durham’s businesses – Obsidian Enterprises and Fair Financial – occurred on the same day a 16-month-old securities registration that allowed Fair to sell investment certificates to investors expired. A recent story appearing in the Indianapolis Business Journal raised questions about whether Fair Financial, a consumer finance company, had the ability to repay about $200 million to investors.
The raids on Durham’s offices in downtown Indianapolis and in Akron, Ohio, resulted in agents carrying away boxes of financial information related to Fair and Obsidian Enterprises.
Durham, 47, is known as both a leveraged-buyout specialist and someone with a penchant for the good life. A former attorney at the Indianapolis law firm of Ice Miller, Durham married into the wealthy Indianapolis family of entrepreneur Beurt and Corey SerVass, marrying their daughter, Joan, in 1989. The two would later divorce.
Durham’s name made headlines in 2008, when he, along with Indianapolis businessman Daniel Laikin, invested in National Lampoon, a Los Angeles company that has made the films Animal House and the Chevy Chase Vacation movie series.
On Dec. 15, 2008, the Securities and Exchange Commission (SEC) charged National Lampoon CEO Daniel Laikin and others of engaging in fraudulent schemes to manipulate the market by generating purchases of company stock in exchange for pre-arranged cash kickbacks. Once the SEC announced its charges against Laikin, National Lampoon’s stock value quickly began to hemorrhage, plummeting about 80% in three days. It now trades for 25 cents a share.
Durham was not accused of any wrongdoing over National Lampoon. He later became the interim CEO of the company.
In late 2005, Durham bought and then sold stock in local cell-phone distributor, Brightpoint. At the time, Durham purchased 430,000 shares of Brightpoint at $1.50 per share. Shortly thereafter, he sold many of his shares for $27 a share, creating a tidy profit of some $40 million for himself, according to a January 2008 story in Indianapolis Monthy. Brightpoint is run by Robert Laikin, the brother of Daniel Laikin, who was indicted by the SEC in 2008.
On Nov. 25, 2009, WTHR-TV interviewed a former business partner of Durham’s, Tim Porter. Porter, who owns the Great American Run Car Race, says he met Durham two years ago when the two men became business partners. They later parted ways. According to the WTHR story, Porter says Durham has defrauded Ohio investors in Fair Financial for more than $200 million.
“It’s a mini Bernard Madoff. A mini Ponzi scheme. And when you stand back and look at it from the outside in, you can see what they’re doing,” said Porter.
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