HEADLINES
PONZI BUST FORMER CEO OF CARPENTER BUS SENTENCED TO 50 YEARS IN FEDERAL PRISON
WRITTEN BY BILL PAUL Tim Durham, the former
president and CEO of Carpenter Bus Manufacturing Co., on Nov. 30 was sentenced to 50 years in federal prison. Carpenter was considered one of the major school bus manufac- turers in the country during its hey days of 1919 to 2001, when it finally closed its doors. Durham was president of the company during the late 1990s. He became president after Dr. Beurt Servass, his then-father-in-law, purchased Carpenter from a previous owner. Majority owner Spartan Motors closed Carpenter Bus in 2001 after two decades of finan- cial struggles. Durham was convicted of an elaborate Ponzi scheme, in which a company he owned, Fair
Financing, hid its deteriorating financial conditions from regula- tors and investors. Durham, 50, and his partner Jim Cochrane purchased Fair Finance in 2002. Te pair and another associate, Rick Snow, were found guilty last June of securities fraud, conspira- cy and wire fraud. Akron, Ohio-based Fair
Financing originally purchased receivables at discount prices, raising funds to do so through the sale of interest-bearing certificates. After Durham and Cochrane acquired the company in 2002, they gradually shifted from providing commercial fi- nancing to making personal loans to themselves as well as loans to various business enterprises they owned or controlled.
24 School Transportation News January 2013 Durham used loans from
the company to fund a lavish lifestyle, including purchasing a 30,000-square-foot mansion, clas- sic cars and other luxury items. By the time the scheme was
uncovered, Durham bilked more than $200 million from 5,000 investors. For his role in the scheme, Cochrane was sentenced to 25 years in prison. In handing down Durham's sentence, Judge Jane Magnus Stinson said she found “no sincere remorse” and described the case as one of deceit, greed and arrogance. Durham was also a well-
known fundraiser for the Republican Party. Several Indiana politicians, including Gov. Mitch Daniels, returned campaign funds he donated to them. l
£ Tim Durham, far right, enters an Indianapolis federal courthouse last spring while on trial on Ponzi scheme charges. He was found guilty, and last month was sentenced to 50 years in prison. Also pictured are Durham’s attorney, left, and son.
INDIANAPOLIS BUSINESS JOURNAL
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