Fair Finance, Tim Durham Update

It’s been almost a year since a bankruptcy trustee came on board to help investors recover the $200 million they’re owed by disgraced business owner Tim Durham and his Fair Finance Company.  Now, in an attempt to recover some of the money owed to investors, trustee Brian Bash is suing Durham’s sister, Dana Osler, and her husband, Jeffrey. The Oslers’ are named in a Jan. 14 lawsuit, which claims they defaulted on a loan from Fair Finance and owe $1.2 million.

The Oslers also are the subject of a lawsuit brought by Bank of America, which says the couple defaulted on a 2007 mortgage on their Geist Reservoir home and owe $1 million. Last year, banks filed to foreclose on Durham’s own Geist Reservoir mansion, which is currently up for sale for $5.5 million.

Durham’s legal issues came to head in November 2009, when the FBI raided his offices in Indianapolis and Akron, Ohio. At the same time, the U.S. Attorney’s Office filed court papers alleging that Fair Finance, of which Durham is co-owner, operated as a Ponzi scheme.  Specifically, the U.S. Attorney says Fair Finance used money from new investors to pay what it owed prior investors, thereby “lulling the earlier victims into believing that their money was being [handled] responsibly.”

The Justice Department’s criminal probe into Fair Finance continues.

For some time now, the trustee responsible for overseeing Fair Finance has been trying to recover funds for investors, the  majority of whom are blue-collar Ohioans who purchased more than $200 million in investment certificates with interest rates as high as 9.5% from Durham’s company.

So far, very little has been recovered for investors. Durham and other executives spent millions of dollars from investors in Fair Finance on personal loans to fund their lavish lifestyles. One good piece of news for investors, however, occurred last year, when an auction of most of Durham’s exotic car collection raised some $2.2 million.

“Investor recoveries in cases of this type typically are small, with 10 cents on the dollar considered “unusually good,” said Mark Maddox of Maddox, Hargett & Caruso, in a Jan. 29 article in the Indianapolis Business Journal.