INDIANAPOLIS (AP) — A former chief executive of National Lampoon and two co-conspirators faced possible life sentences Friday after being convicted of swindling investors out of about $200 million.
U.S. District Judge Jane Magnus-Stinson was set to sentence Timothy Durham, James Cochran and Rick Snow following their June convictions on fraud and conspiracy charges.
A jury found each man guilty of securities fraud and conspiracy. It also convicted Durham, a major Indiana Republican Party donor who resigned his National Lampoon post in January, of 10 counts of wire fraud, while Cochran and Snow were convicted on some of those counts.
Prosecutors have said the three stripped Akron, Ohio-based Fair Finance of its assets and used 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.
Durham's lawyers argued Friday that Fair Finance held assets of roughly $240 million at the time it was raided by the FBI in 2009, but that it lost that wealth because investors made a run on the company after federal prosecutors and the media portrayed the operation as a Ponzi scheme.
Prosecutors dismissed that argument, noting that investigators are still trying to find most of the money.
"Investors were endangered by this fraud, they were turned upside down by this fraud," said prosecutor Henry Van Dyck. "It's inconceivable any other kind of analysis could be applied to what happened to them."
U.S. Attorney Joe Hogsett has said none of the three has shown remorse for their crimes and each deserves the life sentence recommended in a probation report.
"Durham has earned a place among the greediest, most selfish and remorseless of criminals," Hogsett wrote in a sentencing memorandum earlier this week.
Attorneys for the defendants were hoping for shorter sentences.
John Tompkins, an attorney for Durham, has asked that the financier be sentenced to three years in prison and two years of home detention. Attorneys for Snow and Cochran also requested sentences lower than those recommended.
Snow's attorney, Jeffrey Baldwin, noted in a sentencing memo that former Enron Corp. CEO Jeffrey Skilling was sentenced to less than 25 years in prison after his convictions on 29 counts of fraud and conspiracy, while former WorldCom Inc. CEO Bernard Ebbers was sentenced to 25 years after being convicted of nine felonies including securities fraud in a loss of more than $1 billion.
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.
Associated Press writer Ken Kusmer contributed to this story.