National Lampoon goes to jail? SEC, Justice Dept. file charges

The chief executive and financial officers of comedy company National Lampoon Inc. were charged today with running a $230 million Ponzi scheme.

Timothy S. Durham, National Lampoon’s chief executive officer, and Rick D. Snow, its chief financial officer, were charged along with James F. Cochran, another associate, by the Securities and Exchange Commission and the Justice Department.

The SEC is accusing the three of orchestrating a fraudulent $230 million scheme involving at least 5,200 investors, many of them elderly.

The three were senior executives at Fair Finance Co. of Akron, Ohio, which they purchased and used to sell interest-bearing certificates. Instead of using the funds to make loans, the three diverted investor proceeds to themselves and others, and to unprofitable entities they controlled, according to the SEC complaint.

National Lampoon is no stranger to allegations of funny business at the top. A former CEO, Daniel Laikin, was charged with securities fraud by federal prosecutors in 2008, for plotting to inflate the company’s share price artificially by paying people to buy shares. He was sentenced in December to three years and nine months in prison.

Durham and Cochran financed a jet-setting lifestyle with the ill-gotten money, spending it on mortgages for multiple homes, a $3 million private jet, a $6 million yacht, and classic and exotic cars worth more than $7 million, the government alleges. They also diverted investor money to cover hundreds of thousands of dollars in gambling and travel expenses, credit card bills and country club dues, and to pay for elaborate parties and other forms of entertainment, the complaint said.

The SEC filed a civil action against the three in U.S. District Court in Southern Indiana, and the Justice Department filed criminal charges based on the same misconduct.

National Lampoon spokeswoman Cora Victoriano said the company had no comment but planned to put out an announcement at some point. InvestmentNews was unable to immediately reach Mr. Cochran for a comment.

The National Lampoon publishes the long-running National Lampoon magazine and also produces feature films, television programming, online and interactive entertainment, home video and book publishing. The company also owns interests in all major National Lampoon properties, including National Lampoon’s “Animal House,” the “National Lampoon Vacation” series and National Lampoon’s “Van Wilder.”