The lawsuit, filed by acting U.S. Attorney Timothy M. Morrison, alleges wire fraud, money laundering and income tax evasion. It contains the following facts:
6. Timothy S. Durham, and his companies and associates, have been involving in a scheme to defraud numerous persons of money by convincing those persons to buy "investment certificates" ... from Fair Finance, Co, an Ohio company, upon the representations that the money given to buy the investment certificates will be invested in low-risk, high yield, short term consumer debts, and the investors will receive high regular interest payments on their investments. In fact, that money was not invested in the types of investments represented to the investors. Instead, the money provided by victims of the scheme was used to make interest and redemption payments to earlier victims of the scheme, thereby lulling the earlier victims into believing that their money was being responsibly, and enticing new investors into the scheme in order to fund payments to the earlier investors.The lawsuit asks for the seizure of four properties owned by Durham, his main residence in Fortville, a home in Los Angeles and two properties in Henry County. The lawsuit also asks for the forfeiture of 18 bank accounts in the name of Durham personally and his businesses Fair Finance, Fair Holding, DC Investments, Fair Financial Services, Obsidian Enterprises, Obsidian Leasing, Fair Facility. The lawsuit also asks for the seizure of an automobile, a 2008 Bugatti Veyron, owned by Durham.
11. Durham kept for his personal use a portion of the funds that were entrusted to him by the purchasers of the investment certificates contrary to the representations made to them.
12. The defendant property constitutes, or was purchased with, or was commingled with, the proceeds of the fraud scheme by Timothy S. Durham.
13. During the course of the fraud scheme perpetrated by Timothy Durham and his associates, Durham operated at least 2 holding companies and 19 operating subsidiaries, with approximately 77 individual bank accounts for these entities.