Cindy Scott has her own thoughts on the prison sentence that should be handed out today to Timothy Durham, convicted of swindling money from her and thousands of others in the Fair Finance Co. fraud scheme.
Indiana businessman Durham and colleagues James Cochran and Rick Snow find out this afternoon in U.S. District Court in Indianapolis if they will spend the rest of their lives in prison for scamming more than $200 million from about 5,300 Ohio residents in the now 3-year-old Ponzi scheme scandal.
Scott, a Cuyahoga Falls resident who lost thousands of dollars after purchasing investment certificates from Akron-based Fair Finance, doesn’t want Durham in jail.
“What I would like to see happen isn’t realistic,” she said. “He should be under house arrest in a tiny apartment and all the money he makes goes to his lawyers. What good does it do to have him sit in jail? He’s freeloading off of us still. He’s an able-bodied person. He should work. He obviously has some sense. He just chose to use it the wrong way.”
The U.S. Attorney’s Office in Indianapolis is seeking what amounts to life sentences for the three men. Defense attorneys, meanwhile, are arguing for much lighter terms.
Durham and Cochran, who bought Fair Finance in 2002, were convicted this summer on conspiracy, wire fraud and securities fraud.
Each man was found guilty of one count of conspiracy and one count of securities fraud. Durham was found guilty of all 12 charges including wire fraud; Cochran was found guilty of six of 10 counts of wire fraud and Snow was found guilty of three out of 10 counts of wire fraud.
While Durham and Cochran have been kept in prison awaiting sentencing, Snow has been under house arrest.
Living the high life
Durham and Cochran were accused of using Fair Finance money to fund a lavish lifestyle with mansions, expensive cars and more. The FBI raided Fair’s Akron-area offices the day before Thanksgiving 2009. The business never reopened and is now in bankruptcy.
Today’s proceedings start at 9 a.m. before Judge Jane Magnus-Stinson with arguments on what is called the pre-sentence report. The U.S. Attorney’s Office has scheduled five victims to speak before the judge for an hour starting at 11 a.m.
Durham is scheduled to be sentenced at 1 p.m., followed by Cochran at 2:30 and Snow at 3:30.
Durham’s lawyer, John L. Tompkins, has urged the judge to give his client three years in prison followed by two years of home confinement and then three years of supervised release.
“We respectfully submit that an appropriate sentence in this case would be a period of incarceration substantially below the life sentence suggested by the pre-sentence report,” Tompkins wrote.
He argued that Durham never intended anyone to lose money investing in Fair Finance. “The actual losses incurred by the investors were caused by events other than the offenses of conviction,” Tompkins wrote. The losses instead were largely the result of the Great Recession and then “mistakenly labeled a Ponzi scheme by the government and the press, which caused a significant reduction in demand for the investment certificates Fair Finance had been issuing prior to the recession,” he wrote in part.
The uninsured investment certificates, which paid high interest rates, historically had been used by Fair Finance to provide capital for its primary business of buying and processing accounts receivables.
Cochran’s public defenders, meanwhile, said their 57-year-old client had a “relatively limited role” in Fair Finance “notwithstanding an impressive title” in arguing that he should not get a life sentence.
Snow’s lawyer, Jeffrey Baldwin, said his client “did not profit from this criminal activity beyond the salary he was paid. ... Mr. Snow lived within his means. He did not indulge in a lavish lifestyle or use Fair monies to buy expensive cars, vacation homes, yachts, etc.”
Snow also is “quite remorseful for his involvement in the loss suffered by the innocent investors in Fair Finance,” Baldwin wrote.
“His role in the fraud was extraordinarily limited,” Baldwin wrote. “Mr. Snow did not ... take loans from Fair Finance. His crime is in his reliance on Durham and Cochran. He simply believed he was doing his job.”
Baldwin wrote “Durham is almost universally recognized as the mastermind of the fraud. Durham’s personal finances, and to a lesser extent, Cochran’s, were central to the fraud.”
Family seeks leniency
The filings to the judge include letters from family members of the convicted men asking for leniency.
Cuyahoga Falls resident Vincent DiGirolamo and his wife, Nancy, lost substantial money investing in Fair Finance. DiGirolamo said they had invested with the company for years before Durham and Cochran bought it.
“It had a long track record,” he said. The previous owner, Don Fair, “ran the business as it should be run, as a consumer finance company.”
Many people bought Fair Finance investment certificates for the interest they paid, DiGirolamo said. “These were not people with an enormous amount of wealth. They received the interest for decades and never had a problem.”
But DiGirolamo said it was hard for him to say what kind of prison sentences Durham, Cochran and Snow should get. He guessed that the judge will decide to send the men to prison for less than life but more than the minimum being asked by the defense attorneys.
“It’s an unfortunate situation,” he said. “A lot of people have been hurt.”
Jim Mackinnon can be reached at 330-996-3544 or firstname.lastname@example.org