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Twenty years after he left a top Indianapolis law firm on his quest to become the richest man in the world, Timothy S. Durham was arrested at his Los Angeles-area home on charges that he masterminded a fraud that bilked thousands of Ohio families out of more than $200 million.guess handbags

Federal prosecutors announced the charges Wednesday in Indianapolis, much to the relief of residents across Ohio stung by the implosion last year of Fair Financial, a small finance company that authorities say Durham and his lieutenants looted to support a lavish lifestyle.

"It's a blessing that they are going to prison, and will go to prison," said Dale Henthorn, 71, an Ohio retiree who reported losing $237,000 in life savings in the alleged scheme. "They took us pretty bad. They ruined our lives."

The charges, made by a federal grand jury sitting in Indianapolis, are allegations that federal prosecutors Winfield Ong and Joe Vaughn now must prove in court.

Durham; James F. Cochran, 55; and Rick D. Snow, 47, each were charged Tuesday on 12 separate counts of conspiracy and wire and securities fraud related to the operation of the finance company in Akron, Ohio. One wire fraud count carries a maximum prison sentence of 20 years upon conviction.

Regulators at the Securities and Exchange Commission weighed in as well, filing a civil lawsuit Wednesday. It contends Durham and Cochran used loans from Fair "to pay their daily living expenses and to support lavish personal lifestyles, including mortgages for multiple homes, more than 40 classic cars worth over $7 million, a $3 million private jet, a $6 million yacht, hundreds of thousands of dollars of gambling and travel expenses, credit card bills, and country club dues, and for elaborate parties, and other forms of entertainment and expenditures. They also distributed large amounts of money to family members and friends."

The federal cases brings few new details to the sensational Durham tale. Splashy FBI raids in November 2009 shut down Fair Financial and his main investment firm, Obsidian Enterprises in Indianapolis.

Durham and Cochran were business partners at Obsidian when they bought the long-established Akron finance company in 2002 and hired Snow as its chief financial officer.

By prosecuting Durham, the government will put the public spotlight squarely on the flamboyant 48-year-old lawyer.

He walked away from a plush labor law job at the big Ice Miller firm to work with prominent Indianapolis businessman Beurt SerVaas.

After leaving the SerVaas fold in 1999, he formed Obsidian to buy unglamorous industrial firms but later made headlines in Indianapolis, saying he wanted to become the world's richest man. By then, he had taken over Fair Financial, become a major contributor to the campaigns of Gov. Mitch Daniels and local Republicans, owned a yacht and a mansion, and had invested in glamour businesses, including National Lampoon, a Los Angeles film company.

Along the way, he rankled local supporters who sensed he had tuned them out as his focus turned to Fair Financial.

"Whether Tim is guilty, the courts will decide," said Jerry Williams, an Indianapolis attorney who briefly invested in Obsidian when it started. "But all the stories that have come out about people in Ohio investing in Fair Financial and getting little or nothing back, that's a sad story about capitalism."

While the Fair bankruptcy proceeding has been making headlines in Akron and Indianapolis, federal authorities stayed largely quiet until Wednesday.

The SEC contends the trio committed fraud by lending $230 million from Fair to Durham and Cochran and their other businesses, their colleagues and friends. Daniel M. Hawke, an SEC investigator in Philadelphia leading the agency's white-collar crime unit, handled the case.

Fair raised the money from 2002 to 2009 by selling Ohio investors certificates that promised they'd get their money back plus a high rate of interest. However, the SEC contends Durham, Cochran and Snow "concealed from investors that Fair's financial condition had substantially deteriorated" because the insider loans were not being repaid. "Fair did not have sufficient cash flow to meet its obligations to investors," the SEC claims.

U.S. Attorney Tim Morrison said an undercover investigation into Durham's operations began in September 2009. It led to the largest white-collar probe ever in Indiana.fashion trends 2011

Automatic not-guilty pleas were entered Wednesday on behalf of Durham, Cochran and Snow. A trial was scheduled for May 16.

Durham, who was in custody in Los Angeles on Wednesday, could not be reached for comment. He previously said that purchases of items such as exotic cars were sound and legitimate investments.

Phone calls to National Lampoon were not answered. Durham has been serving as chief executive officer of the Los Angeles film company since 2009.

Durham's attorney Larry Mackey could not immediately be reached for comment. Cochran's lawyer James Voyles also could not be reached.

Snow's attorney Thomas Farlow said his client maintains he is innocent.

Morrison, the federal prosecutor, presided over a news conference Wednesday about the charges. Asked why the government did not take control of Durham's many assets after the FBI raid in late 2009, Morrison said prosecutors at that point had not had time to gather sufficient facts proving any wrongs were committed.

Durham, meanwhile, was apparently able to sell off houses and other valuables.

By leaving the assets unfrozen, Morrison said, Fair Financial in bankruptcy had valuable items to sell. If the government had seized the assets, the property by law would have remained in federal hands and could not be released to Fair Financial investors.

Cleveland attorney Brian Bash is serving as the U.S. trustee in the Fair Financial bankruptcy. Last year, Bash auctioned off automobiles and pieces of art purchased by Durham and his associates, gathering $1.5 million for investors who lost money.

"I think we've picked off the low-hanging fruit," said Cleveland attorney Kelly Burgan, Bash's counsel on the bankruptcy case. "But the dollars that we've recovered from the sale of cars and art are a pittance in terms of the $200 million" that investors lost.

Burgan said the trustee will next try to recover loans and other assets. "Hopefully, we can recover more cash," Burgan said.

Mark Edington, West Salem, Ohio, has given up hope of ever getting his investment back.

Nearly retired from a 25-year career as a union car hauler, Edington and his wife, Penny, a school bus driver, face a loss of nearly $50,000 they'd socked away with Fair Financial.

The money was supposed to fund a granddaughter's college education. Another chunk was what Edington called "my Corvette money," which, he quickly adds, most likely would have been spent on their granddaughter as well.

"We have pretty much come to the conclusion we are not going to get anything back," Edington said. "We are trying to put it behind us, really."

Henthorn, who lives in Beallsville, Ohio, lost his life savings of $237,000 plus promised interest in the collapse of Fair Financial.

It was money he had saved during 42 years of finishing concrete and performing other construction jobs as a member of the Laborers Union in Ohio.power balance

"I thought I had enough money to carry me all the way through retirement to my funeral, but I ran into people who took my money because they'd rather have fancy cars and boats," Henthorn said.

Now he lives on $1,600 a month from Social Security. His wife died several years ago, so he lives alone.

Like many others who lost money in Fair Financial, Henthorn said, "I thought I could trust them. I just hope this never happens to anyone else. Why do we have to put up with all this greed?"

Instead of sitting on a sunny beach in Florida with his retirement savings, Henthorn finds himself limited to staying close to home and occasionally talking with others who lost money in Fair Financial. "Now that Durham's been arrested, I'd like to know if we can deduct the money we lost from our taxes because we lost it in a Ponzi scheme," Henthorn said. "That's not much, but it would be something."