June 20, 2012 7:28 pm
Jury convicts Ind. financier in $200M fraud scheme - The Guardian
KEN KUSMER
Associated Press= INDIANAPOLIS (AP) — An Indianapolis businessman accused of looting an Ohio-based finance company after buying it and bilking about 5,000 mostly elderly investors out of more than $200 million was convicted Wednesday on all counts.
A federal jury found Tim Durham guilty of securities fraud, conspiracy and 10 counts of wire fraud. His business partners, James F. Cochran and accountant Rick D. Snow, also were convicted of conspiracy and securities fraud, and some wire fraud counts. When sentenced, the men could face decades in prison.
Durham's defense attorney had argued that the men simply made bad business decisions in the midst of the bewildering economic crisis of 2008. But prosecutors alleged that Durham and his partners pillaged Fair Finance to enrich themselves and their friends — buying classic cars, houses and casino trips — and to help Durham's other struggling businesses.
The three men were taken out of the courtroom in handcuffs and will be held in jail pending a hearing Monday in U.S. District Court in Indianapolis. Jurors began deliberations Wednesday morning after the judge denied a request from Durham's attorney for a mistrial.
Outside the courthouse, U.S. Attorney Joe Hogsett said the verdicts were "a powerful warning that if you sacrifice truth in the name of greed, if you steal from another's effort to carve out the American dream to enhance your own, you will be caught."
Hogsett said he hoped the jury's decision would bring some measure of justice to "the thousands of hardworking people whose financial wellbeing was destroyed at the hands of these men."
Defense attorneys were allowed to leave the courtroom ahead of reporters, and it wasn't immediately clear whether they or their clients would be making any public statements. Durham's attorney, John Tompkins, didn't return an email or phone message from The Associated Press seeking comment.
Prosecutors claimed that after buying Akron, Ohio-based Fair Finance in 2002, Durham and his partners stripped it of its assets and tapped it to buy luxury items. The men also were accused of funneling funds from Fair Finance to Durham's Indianapolis-based holding company, Obsidian Enterprises, to keep its failing subsidiaries intact.
Prosecutors claimed the men operated an elaborate Ponzi scheme to hide Fair Finance's depleted condition from investors and regulators until the FBI raided Durham's office in November 2009. By then, the consumer finance company founded in 1934 was $200 million in debt.
Tompkins had 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.
Tompkins said the evidence didn't support the accusation of fraud because Durham stood to lose money if Fair Finance went under, claiming that Durham had sunk millions of dollars of his own money into Obsidian to keep it afloat.
All three men were found guilty on one count of conspiracy and one count of securities fraud. Each also faced 10 counts of wire fraud; Cochran was convicted on six of those counts and Snow on three.
Each of the wire fraud and securities fraud counts carries up to 20 years in prison, while the conspiracy charge carries up to a five-year prison sentence.
A federal grand jury in Indianapolis indicted Durham, Cochran and Snow in March 2010. The allegations against Durham — a major Indiana Republican Party donor — 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.
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Associated Press reporter Charles Wilson contributed to this report from Indianapolis.
Spain's finance minister insists no bailout needed - CBC
Spain's finance minister insisted again Wednesday that the country's government does not need a full-blown bailout, even as the country's sky-high borrowing costs remained at dangerous levels.
On Tuesday, the interest rate on the government's 12-month treasury bills rose to 5.07 per cent from 2.98 per cent at the last such auction on May 14. The rate on the 18-month bills soared to 5.10 per cent from 3.3 per cent.
By Wednesday, the interest rate, or yield, on the Spanish benchmark 10-year bond fell 22 basis points to 6.78 per cent, below the seven-per-cent level it has been hovering above since Monday. But such high rates are still considered by market-watchers to be unsustainable over the long term rate and eventually forced Greece, Ireland and Portugal to ask for international financial help.
Finance Minister Cristobal Montoro told Parliament, however, that Spain's government won't need the same kind of assistance "because it does not need to be rescued."
After years of insisting its banks were among the healthiest in Europe, Spain did recently acknowledge its financial sector will need a rescue package to protect it from a property boom that went bust in 2008. But investors are now more concerned that the country itself may have to be bailed out and this could seriously test the strength of the entire European Union's finances.
Fears about high public debt
Worries about Spain's ability to repay its debt grew last week when the country agreed to accept a eurozone loan of up to $129 billion to shore up its ailing banks, which are sitting on massive amounts of soured real estate investments.
The big fear is that, as the money will count as a loan and raise Spain's overall debt load, the country's financing costs will suffocate the government as it tries to wade its way through a recession and a 24.4 percent jobless rate.
Because the government is ultimately responsible for repaying the banks' bailout money, the deal has increased fears about the size of public debt. If the government cannot get the bailout money back from the banks, it will be saddled with the losses.
Those losses could prove too much to handle for the government, which is already struggling with a second recession in three years and the highest jobless rate among the 17 countries that use the euro.
Independent audits on the state of Spain's banks are due Thursday and these will help Spain determine how much it needs from the $129-billion lifeline the 17-country eurozone has agreed to set up.Greek coalition to plead for leniency on bail-out - Daily Telegraph
Top of the requests Mr Zanias is likely to be a two-year extension for a deadline to find €11.5 billion in public spending cuts by the end of 2014.
Aides to Mr Samaras have said that reductions in sales and corporate taxes and increases to the lowest pensions were also among his priorities, in a bid to alleviate the social hardships deepened by the austerity measures attached to two bailouts totalling €240 billion.
The Eurogroup talks "will be the first big battle on the revision of the bailout agreement", said Evangelos Venizelos, the Pasok leader and former finance minister. With Greece in danger of running out of money in a month, he stressed that the coalition sought "the creation of a framework that will allow us to move to positive growth and to combat unemployment".
Eurogroup chief Jean-Claude Juncker said on Tuesday taht there was scope to discuss "extensions" to Greek austerity measures but not "changing the substance of the agreements". Volker Kauder, the parliamentary leader of Angela Merkel's Christian Democrat MPs, warned Greece that the German parliament, which has a veto over bailouts, was not ready to make any major concessions.
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