The FBI went after Fair Finance Co. co-owner Timothy Durham's high-class wheels this week.
FBI agents seized exotic and luxury cars that Durham owned and apparently are already under the control of Fair Finance's court-appointed bankruptcy trustee. Durham's lawyer said the FBI on Thursday raided three locations in two states.
These were the first FBI raids since last November, when agents seized computers and records from Fair Finance's Akron headquarters and a related business in Indiana.
Fair Finance Co. creditors will get the proceeds from the sale of any of the valuable cars owned by Durham, trustee Brian Bash said Friday.
Seized vehicles included a Rolls-Royce sedan and an Italian sports car stored at a Durham-owned car business in Indianapolis, according to an Indiana television station. The number and location of the seized vehicles was not available Friday.
The FBI was ''conducting investigative activity,'' a spokesman said Friday. He said he could not comment further.
Durham's Indianapolis lawyer, Larry Mackey, who specializes in defending white-collar crime cases, blasted the raids in a written statement in which he said the FBI wasted taxpayer money and will hurt Fair Finance investors. Fair Finance owes more than 5,300 creditors — primarily peo
ple in the Greater Akron area who bought noninsured investment certificates — more than $200 million.
Bash, a Cleveland attorney who is the court-appointed trustee overseeing Fair Finance in its Chapter 7 federal bankruptcy proceedings, said he retains liens on Durham's vehicles. Most of the vehicles are with an auctioneer who specializes in antique and exotic cars, he said.
Investors earlier this year forced Fair Finance into bankruptcy to try to recover their money. Court records show the federal government suspected the consumer loan and accounts receivables business was being operated as a Ponzi scheme after it was sold to Durham and partner James Cochran in 2002.
Hopeful and appreciative
''We are most hopeful and appreciative the government seized these assets to protect our investors,'' Bash said. ''The fact they [the FBI] seized them is not troublesome.''
Bash and his counsel, Kelly Burgan, said that the FBI told them about the raids and that they have been exchanging information.
As of Friday afternoon, they were still trying to determine how many vehicles the FBI seized, Burgan said.
She and Bash said they have liens on 20 to 21 Durham-owned vehicles, including possession of the titles. Burgan said they believe they have liens on the vehicles seized by the FBI.
''Our exchange of information is ongoing,'' Burgan said. While the FBI was not acting on behalf of the trustee by seizing the vehicles, they share the goals of saving, preserving and protecting assets for the investors, she said.
''We're pretty sure we have titles to all of the vehicles Durham says he has,'' Burgan said.
Fair Finance investors will get the benefit of the proceeds of any vehicle sales, whether the trustee does the sale or the FBI does, she said.
Lawyer's statement
Durham's attorney, Mackey, is a partner in the Indianapolis firm Barnes & Thornburg. Mackey's statement in full reads:
''If the FBI were as focused on investors as they are on creating headlines, they would know that today's seizures were a total waste of taxpayer monies.
''Several weeks ago and under no obligation to do so, Tim Durham provided the original titles to each of these vehicles to the bankruptcy trustee for Fair Finance. He did so for one reason: to mitigate Fair investor losses.
''The cars seized today from three sites in two states with teams of FBI agents have effectively been the property of trustee for more than a month.
''The FBI apparently chose to grandstand searches of Tim Durham rather than make a phone call to the trustee and discover that those vehicles have long ago been secured by the trustee to benefit the investors.
''The FBI surely knows that any car, and particularly car collections, are worthless without titles. Today's seizures were another unfortunate example of the FBI acting before they get the facts.
''The honest taxpayer loses now as the FBI's actions today have only served to start a battle with the trustee; whose time to fight that battle will sadly reduce recoveries for the investors. Avoidable, embarrassing and regrettable.''
Indiana media have also reported that Durham has put an Indiana mansion up for sale with an asking price of $5.5 million.
Burgan said Durham's lawyers have been responsive to the trustee and that she is in almost daily contact with them.
In a related matter, Bash has hired the Cleveland Auction Co. to sell off Durham's art collection, which is now in hiscontrol.
The art auction could take place this summer and some ''prominent'' people have already expressed interest in some of the pieces, Burgan said.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
