Federal agents searched the Indiana and Ohio offices of two companies owned by an Indianapolis businessman Tuesday, serving warrants a month after a newspaper questioned whether the Ohio firm is capable of repaying some $168 million owed to investors.
Federal agents searched the Indiana and Ohio offices of two companies owned by an Indianapolis businessman Tuesday, serving warrants a month after a newspaper questioned whether the Ohio firm is capable of repaying some $168 million owed to investors.
FBI special agent Michael Welch said in a statement that agents served search warrants Tuesday at Obsidian Enterprises of Indiana, a leveraged-buyout firm with offices on the top floor of Indianapolis' 48-story Chase Tower.
At the same time, agents began raiding the offices of Fair Financial Services in Akron, Ohio, Welch said.
Both companies are owned by 47-year-old Timothy S. Durham of Indianapolis.
Welch said the warrants are sealed and the FBI would have no additional comment, but his statement also urged "anyone who has had dealings with Fair Financial Services or has information or concerns" about it to contact the FBI.
FBI agent Wendy Osborne, who provided the statement, declined to comment further.
Durham did not immediately respond to phone messages left after hours Tuesday at his Obsidian and Fair Financial Services offices and his Indianapolis home.
An Indianapolis Business Journal investigative story published in October raised questions about whether Fair Financial could repay Ohio investors who bought more than $168 million in investment certificates.
The newspaper said Durham purchased the consumer-loan company in 2002, but has treated it like a personal bank since. It reported that Ohio securities filings show that Durham, partners and relative firms owe investors more than $168 million.
Durham has owned Obsidian Enterprises since 1998, pooling $15 million from investors to acquire Lake City Forge, an auto parts maker, in a leveraged buyout. Eighteen months later, he sold the company for $30 million.
That success was followed by a series of purchases of trailer makers, a truck body manufacturer, a luxury coach leasing firm and a rubber reclaiming business.
Meanwhile, legal questions loom over another business where Durham is a major investor, Los Angeles-based National Lampoon Inc., the comedy film company best known for the "Animal House" and the "Vacation" film series.
Lampoon's shares have traded for less than 50 cents since December, when the U.S. Securities and Exchange Commission filed civil fraud charges against the company and a grand jury indicted then-CEO Dan Laikin on stock-manipulation charges.
Laikin pleaded guilty in September to conspiracy in exchange for prosecutors dropping a count of securities fraud.
Durham, who was not implicated in the criminal case or named in the SEC's civil lawsuit, now serves as the company's acting CEO.
