Ex-National Lampoon CEO Durham Seeks Acquittal at Trial

Timothy S. Durham, a former National Lampoon Inc. president and leveraged buyout firm executive didn’t defraud investors in Ohio-based Fair Finance Co., his lawyer told federal court jurors in Indianapolis.

Defense attorney John L. Tompkins, in his closing arguments today ending an eight-day trial, called prosecutors’ fraud allegations a “false premise,” saying his client tried to sustain the Akron-based company by putting $28 million of his own money into it.

Durham and two other men were indicted last year for allegedly cheating 5,000 investors in a $200 million scheme involving interest-bearing notes issued by Fair Finance.

Durham and co-defendant James F. Cochran, aided by co-defendant Rick Snow, made false and misleading statements about the company’s financial condition, prosecutors said. The men maintain they are not guilty.

Each faces 10 counts of wire fraud and one of securities fraud, all punishable by as long as 20 years in prison, and one count of conspiring to commit those crimes.

“Durham was the master.” Assistant U.S. Attorney Winfield Ong said in his closing argument. “Cochran was the sales guy. Snow was the finance guy.”

Durham used a company that he and Cochran controlled as a “slush fund,” into which they diverted $85 million derived from Fair Finance, Ong said.

Obsidian Enterprises

Durham is CEO of the Indianapolis-based leveraged buyout firm Obsidian Enterprises Inc. He resigned his National Lampoon post in January. That company isn’t mentioned in the indictment.

Durham and Cochran acquired Fair Finance through a holding company in 2002. Operating in Ohio since 1934, Fair Finance provided liquidity to businesses by buying their accounts receivable at a discount. The company raised money by selling interest-bearing certificates to investors, according to the indictment.

Before jurors begin deliberations, they will be instructed tomorrow by U.S. District Judge Jane Magnus-Stinson on the law they must apply to the evidence they heard at trial.

The case is U.S. v. Durham, 11-cr-00042, U.S. District Court, Southern District of Indiana (Indianapolis).

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