INDIANAPOLIS (WISH) - A twist in the case of indicted Indianapolis businessman Tim Durham's alleged ponzi scheme bilking hundreds of millions of dollars from thousands of investors.
The man who sold Durham the Fair Finance company, Donald Fair, is accused of knowing what was going on and keeping quiet. Now he's being sued for hundreds of millions.
Fair sold his Akron Ohio finance company to Durham and business partner John Cochran in 2002. Durham and Cochran are accused of using Fair Finance to pay for a lavish lifestyle. In 2010, Fair told 24-Hour News 8 about Durham: "He's a thief."
And that's exactly what the Fair Finance Bankruptcy Trustee alleges, too. In a lawsuit filed against Fair, trustee Brian Bash alleges that Fair knew Durham and Cochran were acting illegally, but took no action to stop it.
In the more than 50-page filing, the trustee alleges that Fair knew or should have known about Durham's theft. Fair was paid $16 million for the company but stayed on as a consultant for five years for an additional $4.1 million. The trustee alleges Fair knew Durham and Cochran were using his name and continuing involvement in the company to help them fraudulently solicit hundreds of millions from noteholders.
In Fair's 2010 interview with 24-Hour News 8, he admitted he knew Durham was lending a lot of money to himself.
"I did. And I was concerned," he said.
He said he didn't tell anyone because of this advice from his attorney, recalled by Fair: "It's out of your hands. You don't own the company. And be careful of what you say."
Patrick Keating, Fair's attorney told 24-Hour News 8 on Friday: "The trustee's allegations are completely erroneous." He added that Fair couldn't have done anything to prevent what happened.
The trustee is suing for at least $150 million and is asking for triple damages of at least $450 million.
Fair's attorney also said Fair is sorry about what happened to the investors who lost money. He said if anyone is to blame, it's the Ohio Division of Securities, which failed to look closely enough at the company and failed to take action quickly enough when they realized something was wrong.
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