An investigative report in the Indianapolis Business Journal last month raised questions about Fair's ability to repay its investors -- most of whom are based in Ohio -- who had purchased $197 million in investment certificates. IBJ reported that Durham had used Fair to fund other business interests, some of them unsuccessful, and that he and related parties owed Fair more than $168 million.
A lawyer for Durham has said his client is cooperating with investigators and believes he has done nothing wrong.
But it's Durham's political connections and flashy lifestyle that really make this story pop.
Durham, 47, who bought Fair from Donald Fair, the son of its founder, in 2002, has been quoted as saying he longs to die as the richest man on earth, and was profiled on the CNBC segment "Rise of the Super Rich." In the court filing, the Feds sough to seize Durham's assets, including a 30,000-square-foot mansion, a home in Los Angeles, and a Bugatti sports car. He also owns a 100-foot yacht, and is a major investor in National Lampoon, which made the movie Animal House, among other raucous hits.
Durham's MySpace page reportedly once showed pictures taken at a 2007 party he hosted at his mansion -- including one that showed two naked women kissing. The page also reported that Penthouse magazine model Martina Warren was there.
Durham raised $160,000, and served as finance chair, for the campaign of Marion County prosecutor Carl Brizzi, who has described Durham as a close friend. So close, indeed, that Brizzi agreed this fall to serve on Fair's board after being asked by Durham. Brizzi says he changed his mind after IBJ's investigative report came out last month.
But Durham also played on bigger stages: He was a significant fundraiser for Daniels, and reportedly also served on the governor's re-election steering committee.
A spokesman for Daniels, a former top Bush White House official who has been talked about as a potential 2012 presidential candidate, did not immediately respond to a request for comment on the governor's ties to Durham.
Late Update: Looks like Durham was also a big Rudy Giuliani supporter back in the day when it looked like Rudy might have a shot to be president. The IBJ reported (via Nexis) in May 2007 that Giuliani raised $176,950 in Indiana in the first quarter of that year, more than twice as his closest Republican rival. Leading the former NYC mayor's Indiana fund-raising effort: Durham, and his friend Carl Brizzi, the Marion County Prosecutor.