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IM CRIME FILES: The Audit
Tim Durham took us for a ride. Ahead of a January 2008 profile, he invited us to stay on his yacht (now for sale), admire his cars (repossessed), and lounge at his house (foreclosed). All the while, prosecutors say, he ran a $200 million Ponzi scheme.
Editor’s Note, Feb. 21, 2013:
This follow-up to deputy editor Daniel S. Comiskey’s 2008 Tim Durham profile (“Outrageous Fortune”) appeared in the May 2011 issue and is included among IM‘s Best-Ever Crime Stories. Durham was convicted on 12 counts of fraud and sentenced to 50 years in prison in 2012.
Some say journalism is the first draft of history. Here’s the revision:
A 100-foot-long-yacht named the Obsidian, Durham’s boat looked impressive even in miniature behind the ﬁnancier’s desk. Retailing for $7 million, the three-tier watercraft once hosted the likes of Carl Brizzi and Ludacris. Today, it gathers barnacles in Bodrum, Turkey, where the Moran Yacht & Ship website lists it for sale at $4.8 million and notes the cabin is “designed to allow the crew to go about their business completely separate and out of sight of their owners.”
Once valued at $30 million, Durham’s 70 cars—including a 1929 Duesenberg driven by Elvis Presley, a Lamborghini, a Bentley, an Aston Martin, and a Bugatti—sat in his two-story garage lined with oil paintings. “I make money in that garage,” he told us. Not lately. When the FBI ﬁnally rolled many of the cars onto a truck in June 2010 and sent them to auction a few months later, they fetched only $2.2 million.
Change of Address
A frequent attendee at Hugh Hefner’s parties, Durham tried to re-create that atmosphere at his 30,000-square-foot-house in Fortville. Penthouse girls and celebrities mingled at the residence—including a bizarre two-week stay by Anna Nicole Smith—until Durham listed it for sale in June 2010. And while his creditors hoped they might recover some of the value, Chase sued for foreclosure on it a few months later, revealing that he had an outstanding loan of $3.5 million and almost no equity.
Durham called his 21,000 square feet on the top floor of Chase Tower “instant credibility.” But after the FBI raid on it in November 2009, when armored trucks carried away boxes of documents ultimately leading to his arrest, any credibility he had went with them. When Durham stopped paying the $300,000 monthly rent in the fall of 2009, the building owners replaced him with a catering facility. Today, you can have your wedding reception there.
Picassos, Renoirs, and Rockwells decorated Durham’s home and oﬃce, but no painter was better represented in his art collection than Peter Max. The ’60s pop artist produced six brightly colored portraits of Durham that hung on his second ﬂoor. For once, someone seems to have defrauded him. In July 2010, Vanity Fair ran a story about Max, exposing him as a kind of con artist who swindled ﬁnanciers into buying portraits they hadn’t commissioned. “I’m a businessman,” Max told the magazine. “I love making money.” When Durham’s artwork went to auction this past October, it brought a measly $400,000.
Almost all of Durham’s businesses are now struggling, including Touch Restaurant in Miami, where our story noted the scantily clad women on swings above the bar. But most of Durham’s legal woes concern the Ohio-based Fair Finance, which he allegedly used to run a $200 million Ponzi scheme. The indictment quotes an FBI-recorded phone call from Durham to his business partner James Cochran about reassuring a potential client. “Use the same reason you used yesterday with the other guy,” Durham said. But, he warned him, don’t “use that explanation too often, because it’s not really true.”
Some quotes from Durham’s friends now seem prophetic. “You hear rumors that he’s overleveraged,” said Todd Tobias, his partner in the now-defunct Indy Men’s Magazine. “That he can’t aﬀord the life that he lives.” Bruce Kidd, a former director at the Indiana Economic Development Corporation, added that he was “willing to look for the silver lining as long as he’s living within the law.”
Durham and his girlfriend, Jami Ferrell (Playboy’s Miss January 1997), parted ways some time after the IM story was published. In 2009, Gawker republished this photo of her (without our permission, by the way) for the masses. Over the past several years, Ferrell has run a business renting out her herd of reindeer for holiday parties—a seasonal operation, though probably more proﬁtable than Durham’s Fair Finance.
Until the FBI handcuffed him in West Hollywood this past March, Durham acted as CEO of National Lampoon, a business he co-owned with Dan Laikin (currently serving four years in prison for conspiracy to commit fraud). Under their direction, the company that once produced Animal House and National Lampoon’s Vacation turned out classics like RoboDoc and Jake’s Booty Call. This operation, too, is currently being sued for stock manipulation.
The top donor for former prosecutor Carl Brizzi ($225,000) and Governor Mitch Daniels ($195,000), Durham gave a total of $800,000 to Republicans in recent years. “You know, that article ran about my R-rated MySpace page, and somehow I still get a lot of politicians wanting my money,” he told us with a smirk. More-recent coverage may have done the trick. In March, state senator Mike Delph returned the $10,000 Durham gave him, but Daniels maintains that his money has been spent.
Photos by Tony Valainis
This article appeared in the May 2011 issue.