Fair Finance started in Akron in 1934 as a small accounts receivable and financing company. It long enjoyed a solid reputation. While high-rollers went elsewhere, Fair Finance attracted modest investors, many elderly, who bought uninsured investment certificates, trusting in the company’s record as a well-run operation.
All that began to collapse in 2002, when Indiana businessmen Timothy Durham and James Cochran purchased the company. They and Rick Snow, the chief financial officer, drained Fair Finance to support other operations and to sustain the co-owners’ lavish lifestyles. They drove Fair Finance into bankruptcy, leaving more than 5,000 investors with little hope of recovering the more than $200 million put into certificates.
On Friday, in an Indianapolis courtroom, U.S. District Court Judge Jane Magnus-Stinson handed down appropriately tough sentences for convictions on conspiracy, securities fraud and wire fraud. Durham received 50 years and Cochran, 25, likely life sentences given their ages. Snow received a 10-year sentence, the judge reflecting on the more greedy behavior of the co-owners.
Magnus-Stinson also reflected on the contrast between the small investors who put their faith in Fair Finance and the rapacious behavior of the Durham and Cochran, who used the money to buy exotic cars, yachts and vacation homes. What stands out, too, is how Fair Finance was systematically and methodically looted, becoming a Ponzi scheme, investors never made aware of the company’s increasingly perilous position.
The sentencing took place almost three years after the FBI raided Fair Finance’s headquarters on the East Market Street in Akron, catching investors by surprise. The business, now in bankruptcy, never reopened, destroying the financial security of the small investors who were counting on the money to pay off loans, start businesses or survive financially during retirement.
Viewed in that context, Durham, Cochran and Snow got what they deserved, investors not only left stranded, wishing for pennies on the dollar, but with their hopes and peace of mind shattered by schemes they never saw coming.
