Convicted financier says he can't afford a lawyer

December 18, 2012 - 3:33 PM

INDIANAPOLIS (AP) — An Indiana financier and former chief executive of National Lampoon who was convicted of swindling investors out of about $200 million says he can't afford to hire an attorney to handle his appeal.

In federal court documents filed Monday, Timothy Durham said his multimillion-dollar Indianapolis home is in foreclosure and all of his financial assets are tied up bankruptcy proceedings of the companies he used to control.

Durham's home in Fortville, Ind., about 20 miles northeast of Indianapolis, has a $5 million mortgage but a free-market value of only $3 million, according to the documents.

Durham says his only income this year was $6,000 he received as a director of Dallas-based insurer CLST Holdings Inc. He also has stock in CLST and National Lampoon, the documents say.

Durham was sentenced to 50 years in prison last month on securities fraud and other convictions in the collapse of Akron, Ohio-based Fair Finance. He also was ordered to pay $202.8 million in restitution. Durham received credit for $6 million that already has been recovered.

Durham and two business partners were charged with stripping Fair Finance of its assets and using the money to buy mansions, classic cars and other luxury items and to keep another Durham company afloat. The men were convicted of operating an elaborate Ponzi scheme to hide the company's depleted condition from regulators and investors, many of whom were elderly.

Defense lawyers argued that Durham and the others were caught off-guard by the economic crisis of 2008, and bewildered when regulators placed them under more strict scrutiny and investors made a run on the company.

The trustee handling Fair Finance's bankruptcy did not return a phone call seeking comment Tuesday.

Durham's trial attorney, John Tompkins, said Tuesday that Durham would have a different attorney for his appeal. He said that Durham likely would be represented by a judge-appointed attorney or pro bono lawyer.

Tompkins said the appeal will likely argue that an FBI wiretap of Durham's cellphone was illegal. Tompkins sought to have evidence from those wiretaps thrown out, but the judge refused. Prosecutors said the wiretaps showed that Durham and his business partners discussed how to hide from investors that Fair Finance was running out of money in 2009.

Court documents also said that Durham would appeal the way in which investors' financial losses were calculated.

The charges against Durham led several GOP politicians, including Indiana Gov. Mitch Daniels, to return hundreds of thousands of dollars in campaign contributions sought by Fair Finance's bankruptcy trustee.