Tim Durham sentenced to 50 years in fraud case
Tim Durham will spend the rest of his life in prison. Durham was convicted of cheating his clients out of $200 million in a Ponzi scheme, and on Friday, a judge sentenced him to 50 years behind bars.
U.S. District Judge Jane Magnus-Stinson sentenced Durham, a former chief executive of National Lampoon who was profiled in CNBC's "Rise of the Super-Rich" report in 2008, following his convictions in June on charges of securities fraud, conspiracy and 10 counts of wire fraud.
Durham, who ran the investment business Fair Finance, was sentenced to 50 years. Prosecutors had asked for life, while Durham wanted just three.
Two co-conspirators also learned their fate Friday. Durham business associate James Cochran was sentenced to 25 years while Rick Snow was sentenced to ten.
Durham and Cochran were convicted in June on federal fraud charges. Durham was convicted on 12 counts and Cochran was found guilty on eight counts. Snow was convicted of five different charges.
Prosecutors say the three plundered Akron, Ohio-based Fair Finance of its assets and used the money to fund luxurious lifestyles.
"Mr. Durham will never spend another day of his life in anything other than a federal prison," said Joe Hogsett, US attorney, following Friday's hearing.
Fifty years is effectively a life sentence for 50-year-old Tim Durham.
"What Tim Durham and his associates destroyed in his own self-indulgence is irreplaceable," said Hogsett.
Durham spoke briefly before learning his fate saying, "I feel terrible they lost all their investments. I did truly believe and never intended that these companies would not succeed. I feel really bad."
Durham said he has read all 1,035 letters sent to the court by investors who lost it all, and listened to the four who spoke in court.
A 74-year-old former nun was one of them. She squarely faced Durham and said, "Shame on you!"
Barbara Lucacik asked the judge for justice, saying it was the righteous thing to do. Even though she lost $125,000, she extended Durham grace.
"Absolutely, I forgave him. It's the right thing to do," she said.
"He did wrong and we all have to pay for what we do wrong," said Janey Kalina, investor.
Kalina's father lost $170,000, his life savings as a farmer. She told the court she wasn't out for revenge but justice and felt pity for Durham as he shuffled to a holding cell in handcuffs and shackles.
"I was very sad for them because I don't know where their heart is," said Kalina. "I know my Dad's rewards will be in heaven. I don't know where theirs will be."
Durham's sentencing hearing started with arguments over the losses suffered by investors of Fair Finance.
Durham's attorneys argued Fair Finance had as much as $281 million reflected on a balance sheet in November 2009 at the time the government raided the company.
Durham's attorney said that proved Durham had no intent of loss for any person and said the recommended 220-year prison sentence was excessive by decades and in essence it was a case of "the tail wagging the dog."
Despite Durham saying he felt badly for his investors who lost their life savings, the judge said, "While I accept you feel bad, you don't feel any real, sincere remorse."
Judge Magnus-Stinson told Durham she needed to make sure the laws are respected, and that the nature and circumstance of the crime was long-standing and many years in the making.
"You were raised better than that," the judge said to Durham.
She also said she couldn't wave a magic wand and return money to the victims.
Prosecutors wanted life sentences for all three men. They say the three stripped Akron, Ohio-based Fair Finance of its assets and used the money to buy classic cars and other luxury items and to keep another Durham company afloat.
Attorneys for both Cochran and Snow asked the judge for less substantial sentences than Durham claiming they did not have control of operations at Fair Finance.
"We're gonna let the judge make a decision. The verdict is what it is and we're gonna deal with that going forward," said defense attorney John Tompkins before the hearing.
Tompkins said Snow lived "within the salary that he was provided by the company" and didn't take anything beyond that.
US Attorney Winfield Ong argued that the victims of Fair Finance had not been compensated for their losses. "We would love to see some assets for the victims. Unfortunately, that has not happened," he said.
Instead Ong said trustees who spent two years trying to find assets only found what amounted to $5.5 million.
"The evidence was that they did plunder this company. There was nothing left," said Ong, who determined losses of $202 million from the fraud.