Home Latest News Former CEO of Carpenter Bus Sentenced to 50 Years for Ponzi Scheme
Former CEO of Carpenter Bus Sentenced to 50 Years for Ponzi Scheme PDF Print E-mail
Written by Bill Paul   
Friday, 30 November 2012 13:08

INDIANAPOLIS — The former president and CEO of Carpenter Bus Manufacturing Co. has been sentenced to 50 years in federal prison.

Carpenter was considered one of the major school bus manufacturers 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 his then-father-in-law, Dr. Beurt Servass, purchased Carpenter from a previous owner. Majority owner Spartan Motors closed Carpenter Bus in 2001 after two decades of financial struggles. 

Durham was convicted of an elaborate Ponzi scheme, in which a company he owned, Fair Financing, hid its deteriorating financial conditions from regulators and investors. Durham, 50, and his partner Jim Cochrane purchased Fair Finance in 2002. The pair and another associate, Rick Snow, were found guilty last June of securities fraud, conspiracy 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 financing to making loans to themselves personally and to various business enterprises they owned or controlled. Durham used loans from the company to fund a lavish life style including a 30,000 sq-ft mansion, classic 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 the 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.

 


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Last Updated on Wednesday, 12 December 2012 14:06