INDIANAPOLIS (Reuters) - A former chief executive of the comedy company National Lampoon Inc was sentenced on Friday to 50 years in prison on a conviction of defrauding investors in a separate business out of more than $200 million.
Timothy S. Durham, 50, was convicted in June for his part in what prosecutors said was one of the largest, most brazen financial frauds in U.S. Midwest history surrounding the Ohio-based Fair Financial Services.
Durham and two associates were accused of bilking more than 5,100 mostly small blue-collar investors in Fair Financial from the time he bought the business in 2002 until its collapse in November 2009.
“With this decision, I hope that those victims can now begin the long, difficult process of finding peace, and faith, and trust, once more,” U.S. Attorney Joseph Hogsett said in a statement after the sentencing in Indianapolis federal court.
Durham was indicted with two other co-defendants in March 2011 on multiple counts of financial fraud in connection with the collapse of Fair Financial.
Co-defendants James F. Cochran and Rick D. Snow were also convicted and were sentenced on Friday by Judge Jane Magnus-Stinson. Cochran, 57, who purchased the business with Durham, was sentenced to 25 years in prison. Snow, 49, who was chief financial officer, was sentenced to 10 years in prison.
“Unable to succeed legitimately as a businessman, Durham robbed thousands of investors to finance the trappings of a multi-millionaire lifestyle, complete with exotic cars, planes, mansions and assorted businesses,” prosecutors said in a pre-sentencing report.
Fair Financial’s investor money had for decades been used successfully to buy short-term receivables, and was diverted by Durham and Cochran into failing businesses, startup companies, and lavish offices and lifestyles, prosecutors said in a court filing ahead of the sentencing.
The money went to a car magazine, restaurants, a surgery center, trailer manufacturer, internet companies, a race car team, a replica vintage car manufacturer and other businesses, according to court records.
“The emails and wiretaps introduced at trial show a brazen disregard - indeed contempt - for the largely working class people that made up the majority of Fair’s investors,” prosecutors said in sentencing documents.
Additional reporting by David Bailey in Minneapolis; Editing by Cynthia Johnston and Tim Dobbyn