Category Archives: Obsidian Enterprises

The FBI isn’t talking, but local and national news outlets have plenty to say about simultaneous raids that took place Nov. 24 on two Tim Durham companies – Indianapolis-based Obsidian Enterprises and Fair Financial in Akron, Ohio. At both locations, federal agents hauled away numerous boxes containing banking-related information and other documents.  

The basis for the search warrants is still unknown, but many believe they stem to whether Fair Financial has the money to repay Ohio investors who purchased some $207 million in investment certificates – a question that initially sparked attention following an investigative story published in October by theIndianapolis Business Journal. 

A follow-up IBJ story dated Nov. 28 says the latest situation involving Durham has some investors becoming increasingly concerned: “Many have been purchasing or rolling over investment certificates for years, enticed by lofty interest rates. Fair has been paying as much as 9% on 24-month notes,” the article said. 

That amount – 9% – is three times what commercial banks pay on certificates of deposit with similar terms. CDs have a government guarantee – something Fair Financial investors most definitely do not.  

The IBJ story cites one Fair investor, Harley Himes, 82, who said that he and his wife live off the monthly interest payments they receive from their Fair certificates.  

“I was an investor back when the original owner owned it,” said Himes. “We didn’t have any problem with him. You kind of get used to a good thing. Then you find it is not such a good thing.” 

The original owner of Fair Financial that Himes refers to was car dealer Ray Fair, who founded the business to provide loans to customers during the Great Depression. The company, which also does business as Fair Finance, stopped making vehicle loans in 1959 and began providing second mortgages, small consumer loans, and financial investments. 

Durham bought the business from the Fair family in 2002.  

One of the key issues now facing Durham may be the offering circulars that were provided to prospective Fair Financial investors and, specifically, whether that information contained any material misrepresentations or omissions. 
 
The circulars themselves are more than 40 pages in length, difficult to understand and offer confusing information about insider loans and what constitutes as collateral for the loans. 
 
“Are you telling enough about the entities receiving insider loans, and what kind of shape they are in?” asked Mark Maddox in the IBJ article. Maddox serves as an Indianapolis securities attorney with the law firm of Maddox Hargett & Carusuo P.C., which is considering representing investors in civil litigation against Fair Financial and Tim Durham. 

Read the entire IBJ Nov. 28 story about Durham here.  

If you’ve had investment dealings with Tim Durham or Fair Financial, we want to hear your story. Leave a message in the Comment Box below or via the Contact Us form.

Obsidian Enterprises and Fair Financial Services

Tim Durham is so rich he once stated during a CNBC interview that he often lost track of how many cars he actually owned. Durham runs Obsidian Enterprises and Fair Financial Services, which specialize in buying debt-ridden companies. On Nov. 24, Durham caught the attention of the FBI, which conducted dual raid on the Indianapolis and Akron, Ohio, offices of Obsidian and Fair Financial. 

The FBI did not give a reason for the raids or for questioning Durham in Los Angeles, but it’s believed the warrants have something to do with Fair Financial selling uninsured investment securities and allegedly being unable to repay investors nearly $200 million. The Indianapolis Business Journal published an investigative story on the subject last month.  

According to the IBJ article, Durham purchased Fair Financial in 2002, but has treated “it like a personal bank since.” Ohio securities filings show that Durham, partners and relative firms owe investors more than $168 million.  

On Nov. 25, Ohio Congressman John Boccieri issued a public statement calling for the federal government to seize the assets of Durham and Fair Financial as the FBI’s investigation proceeds. 

As reported Nov. 24 by Ohio.com, Akron resident Lou Laurich, 67, said he invested $8,000 with Fair Financial after reading ads that promised high interest rates on the company’s investment certificates.  

Fair Financial’s roots date back to 1934 when car dealer Ray Fair founded the business to provide loans to customers during the Great Depression. The company, which also does business as Fair Finance, stopped making vehicle loans in 1959 and evolved into providing second mortgages, small consumer loans, and financial investments.

The business was sold by the Fair family in 2002 to Durham. 

Meanwhile, legal questions continue to loom regarding another business where Durham has a vested interest: Los Angeles-based National Lampoon, Inc. The film company, which is best known for “Animal House” and the “Vacation” film series, has found itself in financial straits since last December, when the Securities and Exchange Commission (SEC) filed civil fraud charges against it and a grand jury indicted then-CEO Dan Laikin on charges of stock manipulation. 

Laikin pleaded guilty in September to conspiracy in exchange for prosecutors dropping a count of securities fraud. Durham, who was not implicated in the criminal case or named in the SEC’s civil lawsuit, currently serves as National Lampoon’s acting CEO. ? 

Obsidian Enterprises and Fair Financial

Tim Durham had all the toys and mansions that money could buy. Now he’s got even more on his plate: FBI raids on his two companies, Obsidian Enterprises and Fair Financial, and allegations of ties to ghost employment involving two New Castle police officers.  

FBI agents raided Durham’s offices in downtown Indianapolis and in northeast Ohio on Nov. 24. So far, investigators are giving few details about the reasons behind their interest in the millionaire, but a story last month in the Indianapolis Business Journal raised questions over whether Durham’s finance company had the funds to repay Ohio investors who bought nearly $200 million in investment certificates. The story went on to say that Durham used the company to fund other business interests. 

On Nov. 25, WTHR contacted one of Durham’s former business partners, Tim Porter, who apparently is cooperating with the FBI in its investigation of Durham. According to the story, Porter met Durham in May 2007 and the two became partners. Porter even lived in Durham’s mansion on Geist Reservoir at one time. The two later had a falling out over a business dispute. According to the WTHR story, Porter claims Durham has defrauded Ohio investors in Fair Financial for more $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 in the story. ? ?Tim Durham’s rise to riches has been meteoric. Profiled on CNBC in a story called The Rise of the Super Rich, Durham had a passion for fast and collectible cars. He owned more than 70 vehicles, including Rolls-Royces, Ferraris, and Dusenbergs. He also frequently traveled via his own private jet and owned a $6 million to $7 million yacht in Florida.  The late Anna Nicole Smith once stayed at Durham’s 30,000-square-foot mansion near Geist Reservoir during the Indianapolis 500. 

In addition to FBI investigations of his two companies, Durham’s name is being linked to another scandal involving ghost employment. Last week, Lt. James Heffernan and Patrolman Matthew Patterson, along with Henry County Community Correction Director Doug Sheets were arrested on preliminarily charges of ghost employment, corrupt business influence and official misconduct. 

As reported Nov. 25 by WRTV news, Heffernan and Patterson worked part time for Henry County Community Corrections, with Heffernan serving as the assistant director of the facility. Both were hired by Sheets, a retired state police detective. 

John Tompkins, who is representing Durham, also is representing Heffernan and Patterson in their case. Durham is connected to the New Castle scandal because the off-duty officers often worked at his home. 

According to the WRTV story, Patterson was seen in possession of a Hummer SUV registered in Durham’s name. Meanwhile, court documents in the case indicate that Patterson’s GPS system showed that when he was at Durham’s Geist Reservoir mansion, he claimed on his time sheet that he was checking on people regarding a house arrest. 

If you’ve had dealings with Tim Durham and Obsidian Enterprises or Fair Financial, we want to hear your story. Leave a message in the Comment Box below or via the Contact Us form. We want to counsel you about your legal options.

Indianapolis financier Timothy S. Durham, owner of Obsidian Enterprises in Indianapolis and Fair Financial in Akron, Ohio, is the target of investigation by the FBI. On Nov. 24, federal agents raided Durham’s offices in downtown Indianapolis and Ohio, taking records and information related to his two companies.

Search warrants for the raids are sealed.

Durham , 47, is known as a leveraged buy-out and turn-around specialist. Last month, a story appearing in the Indianapolis Business Journal raised questions as to whether Durham’s business, Fair Financial, could repay Ohio investors who bought nearly $200 million in investment certificates. According to the IBJ story, Fair Financial has continued to raise money from investors, offering interest rates on 24-month notes as high as 9% – an amount that is more than triple what commercial banks offers for certificates of deposit. Unlike CDs, however, Fair’s securities have no government guarantee.  Many of the securities were sold to Ohio residents, who had only modest incomes.

Durham’s story sounds eerily familiar to that of disgraced financier R. Allen Stanford. In February, U.S. marshals raided Stanford Financial’s Houston headquarters, following charges by the Securities and Exchange Commission (SEC) that the bulk of Stanford’s business was an $8 billion Ponzi scheme. Stanford allegedly orchestrated his scam by selling bogus certificates of deposit to investors and promises of high interest rates.

And just like Stanford, Durham had taste for the good life. He’s known as a collector of pricey cars and traveling on private jets and yachts. He also owns a 30,000-square-foot home near Fortville.

If you invested money with either of Timothy Durham’s companies, Obsidian Enterprises or Fair Financial, please contact our lawyers. We want to advise you on your legal options.