Former Durham business partner alleges 'mini Ponzi' scheme - 13 WTHR Indianapolis

Chris Proffitt/Eyewitness News

Indianapolis - FBI investigators remain tight lipped about their raid on the office of millionaire Indianapolis businessman Tim Durham here and in Ohio. Now a former Durham business partner reveals explosive allegations over one of Durham's companies.

Tim Durham has all the toys and money to buy them that anyone could want. He was profiled in a CNBC report about American millionaires, and he lives in a 30,000-square-foot house in Geist.

But on Tuesday, Durham's Obsidian Enterprises offices were the scene of an FBI raid.

The FBI hauled away boxes of records after executing search warrants here and at the Ohio headquarters of Fair Finance, a company that Durham owns. Federal investigators won't say why Durham's offices were raided but a story last month in the Indianapolis Business Journal raised questions over whether the finance company could 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.

"Fair Financial has never failed to pay any note that they've issued or any note that's come due. Fair Financial is a finance company and they make loans," said John Tompkins, Durham's attorney.

While we were unable to reach Durham for comment, we did talk to one of his former business partners who says he's been cooperating with the FBI in the investigation.

Tim Porter owns the Great American Run Car Race. He says he met Durham in May 2007 and the two became partners and that he even lived in Durham's Geist estate for nine months before they had a falling out. Porter claims Durham has defrauded Ohio investors in Fair Financial for over $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.

Durham's attorney says that while FBI agents questioned Durham on Tuesday at the Los Angeles office of one of his companies, he was not arrested.

Tim Durham was a campaign fund raiser for Marion County Prosecutor Carl Brizzi. Brizzi released this statement Wednesday:

"Tim is a friend, and I'm sorry to hear about the recent developments.  I have no knowledge of the allegations, and it would be inappropriate for me to comment."

The Indianapolis Journal reported that Brizzi agreed to serve on the board of Durham's Fair Finance Company, but later changed his mind after he learned that a newspaper was doing an investigative story on Durham.