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Securities Fraud: Ponzi Scammer Tim Duncan Must Pay $1. 3M, Former ArthroCare CEO is Convicted Again in $750M Scheme, & Former Summit Wealth Management CEO is Sentenced to Eight Years

Federal Judge Orders Tim Durham to Pay $1. 3M in Securities Fraud Case

Five years after he was convicted of securities fraud, businessman Tim Durham has been ordered by a federal judge to pay $1.3M in the US Securities and Exchange Commission’s civil case against him. Durham bilked over 5,000 investors in his Ponzi Scam involving his company Fair Finance. He is serving 50 years behind bars.

The Commission had wanted the judge to order Durham to pay back over $200M in ill-gotten gains. Instead, Judge Jane Magnus-Stinson ordered him to pay a $130K penalty for each criminal conviction, of which there were 10. After Fair Finance shut down in 2009, its bankruptcy trustee repaid investors $18M.

Ex-ArthroCare CEO is Convicted in $750M Scam For a Second Time
Michael Baker, the ex-CEO of ArthroCare Corp., has been convicted once again in a $750M securities fraud. An earlier conviction for the same scheme was vacated last year by the 5th U.S. Circuit Court of Appeals.

According to prosecutors, Baker fooled investors by inflating revenue and sales figures. He was found guilty of multiple counts of securities fraud, wire fraud, making false statements, and conspiracy to commit fraud. The government claims that Baker’s fraud caused investors to lose $400M when ArthroCare had to restate three years of earnings.

His co-conspirator, ex-ArthroCare CFO Michael Gluk, pleaded guilty in June for his involvement. His earlier conviction for the scam was also overthrown by the appeals court.

Ex-Summit Wealth Management CEO to Serve Eight Years For Investment Scam
Angelo Alleca, the Ex-CEO of Summit Wealth Management, is sentenced to eight years behind bars. Alleca pleaded guilty of conspiring to bilk investors of over $24M.

Alleca and ex-fund administrator Detroit Memorial Partners LLC Mark Morrow, were accused of telling investors that their funds would go into hedge funds and toward purchasing debt instruments when, in fact, their money went to paying back earlier investors, covering operating costs, and purchasing other securities. False account statements deceived investors into thinking they were making money even though there was nothing in the funds.

According to prosecutors, over 300 victims suffered financial losses. In addition to his prison sentence, Alleca must also serve three years of supervised release and pay back over $24.3M in restitution to investors.

At Shepherd Smith Edwards and Kantas, LTD LLP, our securities fraud lawyers are dedicated to helping investors in recouping their losses. Please contact us today so we can help you determine whether you may have grounds for a securities case.

Judge orders Durham to pay $1.3M, sides with SEC in 6-year-old suit, Indianapolis Business Journal, August 21, 2017
Ex-CEO Convicted of $750 Million Securities Fraud in Retrial, US News/AP, August 28, 2017

Former CEO of Summit Wealth Management sentenced to prison for orchestrating a multi-million dollar fraud scheme, Justice.gov, August 18, 2017

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