INDIANAPOLIS (WISH) - Timothy (Tim) Durham, James F. Cochran, and Rick D. Snow have been indicted and arrested, the US Attorney for the Southern District of Indiana announced Wednesday.
The trio was indicted on 10 counts of wire fraud, one count of securities fraud, and conspiracy to commit wire and securities fraud.
"The arrests this morning in California and Indiana follow the largest corporate fraud investigation in the history of the FBI in Indiana," said Michael E. Welch, special agent in charge with the FBI, said at a Wednesday afternoon news conference.
Durham was arrested at his West Hollywood home Wednesday morning. Durham was expected in a Federal court there Wednesday afternoon.
"We have to get this right," said Timothy M. Morrison, First Assistant U.S. Attorney. "It takes a lot of days because there are more than 5,000 investors and more than $200 million, and our responsibility is not just to describe what happened, but to prove it to 12 people beyond a reasonable doubt."
Durham's failed Fair Finance company was the subject of an FBI inquiry into an alleged Ponzi scheme. $216 Million are missing and 5,400 financials lives were shattered when the Akron, Ohio company went under.
"This is validation of what we believed 14 months ago," said Tim Pettorini, an attorney representing roughly 200 of the alleged victims. "The victims here are not Madoff-like, it wasn't play money, it was life savings lost to these (men) and this scheme."
Brian Bash, the bankruptcy trustee overseeing the liquidation of Durham's Fair Finance told creditors that Durham loaned money from Fair Finance to friends and failing businesses and spent plenty on himself.
According to the federal indictment, Durham and Fair "changed the manner in which Fair (Finance) operated and used its funds. Rather than using the funds that Fair raised from investors (...) Durham and Cochran caused Fair to extend loans to themselves, to their associates, and to the businesses they owned or controlled, which caused a substantial deterioration in Fair's financial condition.."
The indictment continues "Durham, Cochran and Snow then deceived and defrauded investors by making and causing others to make false and misleading statements about Fair's financial condition and about the manner in which they were using Fair investor money."
In December of 2009, the FBI raided the downtown Indianapolis offices of Durham's Obsidian Enterprises.
Police dispatchers in Hancock County say two medical helicopters were called to the scene of a crash late Wednesday night.
SWAT members were called to the city's northwest side Wednesday night.
In the wake of tornadoes that ravaged towns like Kokomo, Hoosiers now have another concern.