by Brian Mahany
Some often complain that white collar criminals don’t spend much time in jail. Post Bernie Madoff, however, things are beginning to change. A U.S. Probation Office sentencing report recommends convicted Ponzi schemer Tim Durham be sentenced to 225 years in federal prison for his role in a mssive Ponzi scheme. Durham calls the recommendation “absurd.”
Durham, age 50, elected to go to trial earlier this summer instead of agreeing to a plea bargain with federal prosecutors. At trial, a jury convicted him of all counts including securities fraud, criminal conspiracy and wire fraud. Under federal sentencing guidelines, he is facing life in prison. 225 years to be exact.
Jurors convicted Durham of running a Ponzi scheme in which approximately 5000 victims were bilked out of millions of dollars. The sentencing recommendation is high but the court can increase the base sentence recommendations based on a number of factors. Because of the number of victims, the fact that most of the victims were elderly and because the losses topped $200 million, the sentence recommendation was enhanced.
Prosecutors say that Durham became CEO of Fair Finance Company in 2005. Although profitable at first, the government proved that Durham (and his business partner and accountant) looted the company for his own personal gain. At some point he began taking and pocketing the millions of dollars being raised from investors.
Prosecutors say that he purchased some 40 automobiles, a private jet and a $6 million yacht. They say he also “borrowed” $200 million from the company. Almost all the money raised from investors was used to help float Durham’s other businesses or to pay off other investors. Little went to the business itself.
Although the jury convicted him, Durham is still fighting. His objection to the sentencing recommendation is long on blame (he apparently blames the government in part for the losses) and short on facts. In a particularly ironic twist, he claims that the losses were made by some poor decisions and the downturn in the economy.
One wonders if he would have been able to steal more if the economy had been better.
Losing one’s life savings to a Ponzi scheme is beyond traumatic. Especially for older folks who simply don’t have enough years left to start from scratch. Unfortunately, there is often little that can be done to get back the money. The government sometimes appoints a receiver but that process can take years. Private attorneys may get involved too – if there are any assets left.
If the money went to other failing business ventures, there might not be much left. To the extent that some money was paid to other investors, some courts will permit the remaining investors to “claw back” interest payments received by earlier investors who successfully cashed out. Of course, the cars and other “toys” can be sold.
The fraud lawyers at Mahany & Ertl help victims of fraud recover their hard earned monies. Often we can collect from third parties such as insurance companies, banks, and brokers who may have sold the fraudulent investment or facilitated the fraud. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731. All inquiries are protected by the attorney – client privilege and kept in confidence.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Legal services available in many jurisdictions.