When Timothy Durham and James Cochran bought Fair Finance in 2002, the company's reported figures described a recognizable lending business. It owed certificate investors about $37 million and held roughly $48 million in income-producing finance receivables.
Case brief
Indianapolis; Ohio investors · 2005–2009
- Recorded outcome
- Convicted in 2012; two wire-fraud counts reversed on appeal; resentenced to the same 50-year term in 2015; related SEC judgment affirmed in 2020.
Key moments
People in this case
- Timothy Durham
Convicted in the Fair Finance fraud
Photo at source · Indianapolis Business Journal · Associated Press photograph
Seven years later, the picture had changed. Debts to investors exceeded $200 million. According to the evidence presented at the criminal trial, the income-producing assets had become loans to Durham, Cochran, their associates and businesses they owned or controlled. [1]
The business still depended on investors believing their money was being managed as promised. The men running it were concealing how much had been directed toward themselves and their other interests.
An established name and a new use for its funds
Fair operated in Akron, Ohio. Durham's criminal prosecution took place in Indianapolis, and the case tied the fortunes of an Ohio investment business to an Indiana financier and his associates.
Investors purchased certificates. In return, the company owed them principal and interest. The arrangement depended on Fair's underlying assets being capable of producing the money needed to meet those obligations.
The acquisition did not instantly erase the company's established identity. That continuity was valuable: new and existing investors could encounter the same business name while the composition of its assets changed substantially.
The prosecution's evidence showed money flowing into insider loans, personal expenses and struggling businesses controlled by Durham and Cochran. The value available to support investors' certificates therefore depended increasingly on the financial affairs of the men controlling the company. [1]
The deception was not merely that some investments performed poorly. The government presented evidence that the defendants concealed Fair's condition and how investor funds were being used.
Accountants raised questions
During 2005 and 2006, independent accountants warned that many of Fair's loans were impaired or inadequately secured, according to the Justice Department's account of the trial evidence.
The response was to terminate the accountants. Fair did not release audited financial statements for 2005 and did not obtain or release audited statements for 2006 through September 2009.
That removed an important independent view of the business at the same time its condition was deteriorating. Investors continued to receive assurances without receiving the audited picture that might have exposed the condition of the loans supporting their investments.
The trial evidence also showed misleading statements to Ohio securities regulators and to investors worried about delayed principal or interest. Employees were directed not to make payments owed to investors. At the same time, money continued to move to the insiders and their businesses. [1]
These details explain why a collapse alone was not the entire criminal case. Prosecutors had to show deception and the defendants' participation in it. The accountants' warnings, missing audits and false assurances connected the financial deterioration with decisions made by the people running the company.
The people holding the certificates
The later appellate account described approximately 5,000 investors and more than $200 million in losses. Many were older people of modest means. [3]
Those investors did not own Durham's wider business interests simply because their money had been directed toward them. They held obligations from Fair and expected payment under those terms.
The distinction became stark when the flow of money stopped. A certificate stated what the investor was owed. It did not guarantee that the company retained sound assets sufficient to pay it.
The scheme's size is best understood through that mismatch. Investor obligations expanded dramatically while the assets behind them increasingly consisted of loans benefiting insiders. The balance sheet could contain entries called loans without those entries providing the protection investors believed they had.
The trial and the first sentences
On June 20, 2012, a jury convicted Durham on twelve counts: conspiracy, ten counts of wire fraud and one count of securities fraud. Cochran was convicted on eight counts, and chief financial officer Rick Snow on five.
On November 30, 2012, Judge Jane Magnus-Stinson sentenced Durham to 50 years in prison. Cochran received 25 years and Snow ten. The court also ordered restitution of approximately $208 million. [1]
The restitution order established an obligation to compensate victims. It did not mean that $208 million had been located or distributed. The difference between a judgment and a recovery is central in a case where the assets had already been drained.
Nor did the original verdict supply the final count of Durham's surviving convictions. His appeal changed part of the result.
Two counts fell; the sentence remained
The Seventh Circuit reversed two of Durham's wire-fraud convictions in 2014 while leaving the other convictions in place. The case returned for resentencing.
On June 26, 2015, the district court again imposed a 50-year sentence. The Justice Department's case-update page records that result. [2] [3]
The sequence also shows why original sentencing releases need to be read alongside later court developments. An accurate historical account includes both the successful portion of the appeal and what happened when the trial court considered the sentence again.
The pages the jury never received
The reversal of two wire-fraud counts arose from a remarkably concrete omission. Count 2 concerned a $250,000 transfer on February 13, 2007. Count 5 concerned $50,000 on November 10, 2008. Prosecutors introduced single-page records showing that the transfers occurred. They intended those pages to be the beginnings of larger exhibits tracing the money, but the supporting pages never entered the trial record. [4]
The full exhibits reached the appellate court later. That was too late to supply what the jury had not received. The court distinguished proof that money moved from proof that these particular transfers furthered the fraud. The government argued that the overall pattern of transfers supported that inference, but the judges rejected treating every movement between the companies as automatically criminal. [4]
This did not unravel the whole prosecution. It identified a failure of proof on two specified counts, while the remaining convictions survived. The gallery marks the missing-exhibit issue as a limitation in the prosecution's record, not as another item of evidence proving guilt. Durham's later resentencing must be read against that narrower ruling. [2][4]
The investigation before the raid
The opinion also explains how investigators moved beyond the company's own presentation. One director, being investigated in another matter, alerted the FBI. Agents sought a wiretap after months of work and described why other methods could not adequately reveal the operation. On November 24, 2009, agents seized Fair's computer servers. The company's doors closed, and bankruptcy followed. [4]
For certificate holders, that shutdown made the gap between the promised investment and the available money immediate. For investigators, the seized records and recorded conversations became material that could be compared with the financial picture sold to customers. The subsequent trial therefore concerned both the numbers and what the people controlling the company knew about them. [4]
A separate civil judgment
The Securities and Exchange Commission pursued a civil case as well. In April 2020, the Seventh Circuit affirmed a judgment in that proceeding.
Durham sought to resist the civil judgment while challenging his criminal conviction through collateral proceedings. The appellate court's decision addressed the effect of the existing criminal judgment on the SEC case. It was not a new criminal trial or the imposition of another 50-year term. [3]
By then, the central history was established across several proceedings: investors had supplied money to Fair, insiders had diverted it, a jury had convicted the defendants, and appellate litigation had altered some counts without eliminating Durham's sentence.
The case's defining change happened before the courtroom years. A company once supported by a conventional portfolio became a source of funds for the people who controlled it. The name on the investors' certificates stayed familiar. What stood behind those certificates did not.
Look closer · 3 visuals
Inside the evidence.
Open a visual to explore what it contributed to the case—and the limits of what it shows. These original illustrations explain the record; they are not photographs of the actual evidence.
The financial picture sold to investors
Original editorial illustration — not an actual evidence photograph or exhibit.
Read the evidence notes
Records and testimony documented the use of investor money and the handling of accounting concerns.
Generic ledger, not an authentic exhibit or a present-day recovery statement.
The missing exhibit pages
Original editorial illustration — not an actual evidence photograph or exhibit.
Read the evidence notes
The trial record showed two transfers but lacked supporting documents establishing their use in the fraud.
This illustrates a failure of proof on reversed counts, not additional proof of guilt.
The investigation reaches the phones
Original editorial illustration — not an actual evidence photograph or exhibit.
Read the evidence notes
The appellate record describes the investigation and the challenge to the wiretap application.
No original recording or fabricated dialogue. The court upheld the challenged authorization.
★ Key evidence used in a conviction · ✓ Exclusion or reversal · ◇ Disputed evidence · ⊘ Excluded at retrial · ◆ Identity / investigative finding, not a conviction. A symbol does not mean one item proved the whole case.
Follow the locations
Put the story on the map.
Follow the dated entries, then select an event to find its regional setting. Shared-location pins open a group of events. Evidence symbols identify important findings and their limitations.
Open the map in its own window ↗Sources & further reading
- Former Fair Financial Company CEO Sentenced to 50 YearsTrial evidence, investor losses, company acquisition, diverted loans, accountants, original convictions and sentences.
- U.S. v. Durham, Cochran and Snow: Case UpdatesJune 26, 2015 resentencing to 50 years after reversal of two counts.
- SEC v. Durham, Seventh Circuit No. 19-1653Criminal appeal background, investors and affirmance of separate SEC civil judgment.
- United States v. Durham, Seventh Circuit criminal appealMissing trial exhibits, reversal of two counts, wiretap and server seizure.
Editorial review: 2026-09-30 · 1276 words