The Securities and Exchange Commission announced that, on March 16, 2011, it filed a civil action in the United States District Court for the Southern District of Indiana, charging three senior executives at Akron, Ohio-based Fair Finance Company (“Fair Finance”) with orchestrating a $230 million fraudulent scheme involving at least 5,200 investors – many of them elderly.
The Commission’s complaint alleges that after purchasing Fair Finance Company, chief executive officer Timothy S. Durham, chairman James F. Cochran and chief financial officer Rick D. Snow, deceived investors while selling them interest-bearing certificates. Fair Finance had previously operated for decades as a privately-held consumer finance company. But under the guise of loans, Durham and Cochran schemed to divert investor proceeds to themselves and others, as well as struggling and unprofitable entities that they controlled. Durham and Cochran further misused investor funds to buy classic cars and other luxury items to enhance their own lavish lifestyles.
In a parallel criminal proceeding the U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of Indiana unsealed criminal charges against Durham, Cochran and Snow for the same alleged misconduct.
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