Timothy Shawn Durham Sr.
1962 (age 60–61)
|Occupation(s)||Attorney (disbarred), investor|
|Criminal status||Inmate #60452-112; incarcerated at United States Penitentiary, McCreary; McCreary County, Kentucky; earliest possible release February 1, 2056|
|Spouse||Joan SerVaas Durham|
|Children||Timothy Durham Jr.|
|Conviction(s)||June 20, 2012|
|Criminal charge||Wire fraud, securities fraud, conspiracy to defraud|
|Penalty||50 years in prison, two years' supervised release (overturned September 4, 2014; reinstated June 26, 2015)|
Timothy Shawn Durham Sr. (born 1962) is an American former lawyer and businessman convicted in 2012 of the largest corporate fraud ever investigated by the FBI in Indiana.His investment firm Obsidian Enterprises invested in a number of companies, including wireless device company BrightPoint and comedy brand National Lampoon, Inc., where Durham served as CEO. In 2012, Durham was sentenced to 50 years in prison in connection with a Ponzi scheme that defrauded 5,400 investors, many of them elderly, of approximately $216 million, according to the U.S. Securities and Exchange Commission.
Durham grew up in Seymour, Indiana. He graduated from Indiana University and its law school.
He worked for law firm Ice Miller after graduation, and in 1989 he married Joan SerVaas. [ citation needed ]Durham soon joined the investment firm owned by his wife's father, Indianapolis financier and longtime city council president Beurt SerVaas. Durham left the firm after his 1998 divorce. Durham was involved in taking over numerous ailing companies, including school bus manufacturer Carpenter, cargo trailer makers Danzer Industries and United Expressline, U.S. Rubber Reclaiming, and bus leasing firm Pyramid Coach.
In 2001, he took his company Obsidian public. The public company then invested in a range of companies, including a rally-car builder, a plastic surgery center, a car magazine, a tour bus operator, a limousine rental company, a nightclub, an Italian restaurant, and a cell-phone billing processor. Obsidian also invested in mobile device distributor BrightPoint and National Lampoon, Incorporated. From 2001 to 2006, Obsidian had cumulative losses of $30 million, according to the bankruptcy trustee. During that time Obsidian was borrowing heavily from Fair Finance Company, an Akron, Ohio-based creditor. Durham and accomplice James Cochran had acquired Fair Finance through a holding company in 2002.Durham appointed Dan Laikin as CEO of National Lampoon Inc. The SEC alleged Laikin conspired to inflate the company's stock price to $5 in order to prevent the company from being delisted from the American Stock Exchange. Laikin alerted authorities to Durham's financial schemes in hopes of getting a reduced sentence. Durham took over as Lampoon CEO after Laikin stepped down.
The offices of Obsidian and Fair Finance were raided by federal agents in 2009, suspected of involvement in a Ponzi scheme. Durham was arrested in 2011.
On June 20, 2012; an Indianapolis jury convicted Durham of 10 counts of wire fraud, one count of securities fraud, and one count of conspiracy to defraud. On November 30, 2012; he was sentenced to 50 years in prison–at his age, effectively a life sentence.While he faced a maximum of 225 years under sentencing guidelines, federal district judge Jane Magnus-Stinson said there was no point in handing down a sentence that long. Nonetheless, Joe Hogsett, the U.S. Attorney for the Southern District of Indiana, called it the longest sentence ever imposed for a white-collar offense in Indiana history.
On September 4, 2014, a federal appeals court overturned two of 10 wire fraud counts against Durham and ordered a new sentencing hearing, saying prosecutors failed to enter some key evidence into the trial record.On June 26, 2015, Durham had his 50-year sentence reinstated. Magnus-Stinson said that "the huge number of victims and the amount of devastation" left little reason to reduce the original sentence. He is serving his sentence at United States Penitentiary, McCreary in McCreary County, Kentucky. He was also sentenced to two years' supervised release, but this was largely academic given the likelihood that he will die in prison. His earliest possible release will be February 1, 2056, when he will be 94 years old.
Fair Finance Co. trustee Brian Bash alleged in a lawsuit filed in 2012 that Durham's mother, Mitza Durham, received more than $831,000 in "fraudulent transfers" from her son between 2006 and 2009 that needed to be repaid to the company estate.In 2014, Mitza Durham agreed to repay Fair Finance Co. $500,000, plus interest.
In 2016, Durham was disbarred by the Indiana Supreme Court.
According to Businessweek , Durham was a prominent Republican fundraiser. He served on the steering committee for Mitch Daniels' successful gubernatorial bid in 2004 and headed the Indiana fundraising effort for Rudy Giuliani's 2008 presidential campaign.
Durham's exploits are featured in the 2015 episode "Playboy of Indiana", of the television series American Greed .
Mail fraud and wire fraud are terms used in the United States to describe the use of a physical or electronic mail system to defraud another, and are U.S. federal crimes. Jurisdiction is claimed by the federal government if the illegal activity crosses interstate or international borders.
National Lampoon, Inc. is a company formed in 2002 in order to use the brand name "National Lampoon" in comedy and entertainment following the tradition of its magazine predecessor, The National Lampoon. In the words of its prospectus, the role of the company was to "develop, produce, provide creative services and distribute National Lampoon branded comedic content through a broad range of media platforms." Since 2002, the company overhauled its corporate infrastructure several times.
Samuel Israel III is an American fraudster and former hedge fund manager for the Bayou Hedge Fund Group, which he founded in 1996. In 2008, Israel was sentenced to 20 years in prison and ordered to forfeit $300 million for defrauding his investors.
Clayton Morris is an American YouTuber, real estate investor, and former television news anchor. He hosts the Redacted news podcast on his eponymous YouTube channel and a podcast on Investing in Real Estate.
Thomas Joseph Petters is a former American businessman and chairman and CEO of Petters Group Worldwide, a company which stole over $2 billion in a Ponzi scheme. He was convicted of massive business fraud in 2009 and is now imprisoned at the United States Penitentiary, Leavenworth. Amid mounting criminal investigations, Petters resigned as his company's CEO on September 29, 2008. He was convicted of numerous federal crimes for operating Petters Group Worldwide as a $3.65 billion Ponzi scheme and received a 50-year federal sentence.
Clarence "Dean" Alford is a former Republican Party member of the General Assembly and convicted criminal.
Bernard Lawrence Madoff was an American fraudster and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the Nasdaq stock exchange. Madoff's firm had two basic units: a stock brokerage and an asset management business; the Ponzi scheme was centered in the asset management business.
James Michael Nicholson is an American fraudster and was the head of the investment firm Westgate Capital Management. The headquarters of Westgate Capital was located in Pearl River, New York. Nicholson was arrested on February 25, 2009, by the FBI and charged by the SEC for allegedly "defraud[ing] hundreds of investors of millions of dollars". Nicholson was indicted by the US Attorney for the Southern District of New York, on April 23, 2009, and was sentenced to 40 years in prison after pleading guilty to defrauding investors in the Ponzi scheme. Nicholson is serving his sentence at the Federal Correctional Institution (FCI) Otisville, a medium security facility for male offenders located on the outskirts of Otisville, New York. His projected release date is April 7, 2043, when he will be 76 years old.
The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernie Madoff, the former Nasdaq chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate multi-billion-dollar Ponzi scheme.
Steven Jude Hoffenberg was an American businessman and fraudster. He was the founder, CEO, president, and chairman of Towers Financial Corporation, a debt collection agency, which was later discovered to be a Ponzi scheme. In 1993, he rescued the New York Post from bankruptcy, and briefly owned the paper. Towers Financial collapsed in 1993, and in 1995 Hoffenberg pleaded guilty to bilking investors out of $475 million. He was sentenced to 20 years in prison, plus a $1 million fine and $463 million in restitution. The U.S. SEC considered his financial crimes to be "one of the largest Ponzi schemes in history".
Bertram Earl Jones is a Canadian unlicensed investment adviser who pleaded guilty to running a Ponzi scheme that CBC News has reported cost his victims "a conservative estimate of about $51.3 million taken between 1982 and 2009". After pleading guilty to two charges of fraud in 2010, he was sentenced to 11 years in prison. After serving four years of his sentence, Jones was released on March 20, 2014.
Gary Allen Sorenson is a Canadian businessman who was arrested at Calgary International Airport on September 29, 2009 for an alleged role in a Ponzi scheme that scammed investors of more than C$300 million, the largest in Canada. On July 28, 2015 Gary Sorenson, 71, and Milowe Brost, 61, were sentenced in a Calgary courtroom to 12 years in prison for their elaborate, multimillion-dollar fraud.
International Investment Group (IIG) is an American financial institution that specializes in short-term trade finance and commercial finance with a focus on emerging markets. Through its affiliate IIG Capital it provides financing to small and medium-sized merchants, traders and processors with a need for supply chain financing.
Daniel S. Laikin is an American business executive. He served as chief operating officer and chief executive officer of National Lampoon, Incorporated from 2002 to 2008.
The Mantria Corporation Ponzi scheme has been described as the "biggest green energy scam" in United States history. A Federal judge in the Securities and Exchange Commission's civil case found Mantria had scammed more than $54.5 million “by egregiously, recklessly, knowingly, and shamelessly perpetrating a fraudulent scheme” that used “misrepresentations, omissions, and blatant lies to induce unsuspecting and unwitting victim investors to liquidate the equity in their homes and take out bank loans to invest in Defendants’ scheme, which was nothing more than smoke and mirrors.” On November 16, 2009, the U.S. Securities and Exchange Commission charged four people who targeted those nearing retirement age who were seeking real estate and "green" investments. Many of these securities were offered by Mantria Corporation.
Zachary Joseph Horwitz, also known by his stage name Zach Avery, is a former actor and producer. In 2021, he plead guilty to securities fraud for his role in defrauding investors of $227 million through a Ponzi scheme and, as a result, in 2022, was sentenced to twenty years in prison.
Frederick Darren Berg is an American entrepreneur, business executive, convicted Ponzi scheme operator, and prison escapee. He is the founder of MTR Western, a motorcoach operator headquartered in Seattle. He sold fraudulent investments through the Meridian Group, a group of investment companies, defrauding nearly 700 investors who lost almost $150 million, and he was sentenced to 18 years in prison in 2012. He has been nicknamed "Mini Madoff" for his crimes' similarity to those of Bernie Madoff. Berg escaped from prison in 2017.