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"Don Fair was or should have been aware of, or was willfully blind to, ample red flags showing Durham's ongoing fraud as early as 2002," the claim states. "Don Fair silently sat by and allowed it to happen," it says.
Fair's lawyer, Patrick J. Keating, claimed Friday his client didn't have details of the business's operations after it was sold in 20012.
"He had no idea Mr. Durham and Cochran were going to run a Ponzi scheme. To claim he knew anything of that is completely erroneous," Keating said.
"I don't like what I see," Fair said. "It is such a departure. It is not how we operated," he added.
The lawsuit claims the company had morphed into a Ponzi scheme, which some investors are compensated with others' investments, by 2003. It says Fair realized Durham had terminated two sets of auditors because of their worries over large loans issued to Durham and other insiders and to failing companies they owned. The 57-page claim seeks at least $150 million from Fair and three trusts that received compensation from the sale of the business.
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