Durham, partner John Cochran and controller Rick Snow are accused of looting Fair Finance and its investors of more than $200 million and driving the company into bankruptcy by spending corporate funds on casino junkets, mansion mortgages, country club fees and excessive lifestyles.
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Van Dyke said the government will argue that the trio misled investors seeking to cash out their accounts, moved money from failing companies to hide bad debts and were captured on wire taps conspiring to commit fraud while unaware that the FBI was listening.
John Tompkins, attorney for Durham, told jurors that his client was caught up in the general economic collapse of 2008 and 2009 which culminated in an FBI raid of Durham's Monument Circle offices just before Thanksgiving. Tompkins said jurors will hear the sounds of panic in Durham's phone calls to his associates in late 2009 as he tried to shift funds and invest his own money in Fair Finance which suddenly found itself under the scrutiny of Ohio securities investigators after the company sought to raise another $225 million in investments.
The first witness to testify was Don Fair whose father founded Fair Finance in the depths of the Great Depression. Fair sold his company to Durham and Cochran in 2002 for $20 million.
Fair explained his conservative approach to investing the funds of older, blue collar Ohioans including several Amish families. Fair said he would reinvest any excess profit back into the company.
After his sale Fair said he expected to be called upon by Durham and Cochran to help find new clients but that call never came.
"I was just wallpaper and I resigned."
Fair said he disagreed with what he determined were risky investment strategies pursued by the new Fair Finance.
Of the company he headed for more than 40 years, Fair said, "It’s been destroyed. They just screwed the company right into the ground."
Government prosecutors promise to introduce not only wire taps of Durham and his associates but also internal e-mails and training documents that will reportedly lay out what it called, "a grand scheme," to defraud investors.
Defense attorneys are expected to argue that the actions of the FBI at a crucial point in time contributed to Fair Finance's downfall.