After four years of litigation, a lawsuit stemming from a charity sale of a rare Duesenberg is over.
And with the ending of the case, defendant Timothy S. Durham owes a Dowagiac, Mich., couple $1 million.
Collecting what is owed them will be difficult, though, because Durham is serving 50 years in federal prison on a charge of wire fraud for his role in an unrelated Ponzi scheme.
Before his arrest and federal indictment, Durham served on the board of the Auburn Cord Duesenberg Automobile Museum.
In September 2009, a Virginia man bought a 1930 Duesenberg automobile that once belonged to William Randolph Hearst.
The Virginia man, James Scott, paid nearly $3 million for the car in what a judge called a rigged auction. Scott never received the title to the vehicle.
After trying for a few months to secure the title, Scott sued a number of people and businesses in connection with the sale of the car, including Missouri car dealer Mark Hyman; a Dowagiac, Mich., couple, Donald and Joan Lyons; Kruse International; and the ACD Museum.
Over the past few years, a federal judge whittled away at the case, ruling in favor of the Lyonses and Scott against Durham. The remainder of the case was dismissed.
According to court documents, the Hearst Duesenberg was to be auctioned at a special event at the museum, placed up for sale by Durham, who claimed ownership of the car and had it on display at the museum. The Lyonses saw the car and offered $1 million for it before the auction, court records said.
But Durham wanted to keep the car in the auction, with the knowledge of the museum. The Lyonses were to pose as unsuspecting winning bidders. However, Scott appeared on the scene, bidding nearly $3 million for the car by telephone. As the bids climbed, Durham and the Lyonses agreed to split the profits of the auction, court records said.
“So the auction was planned to be a sham, and everyone seemed to know it,” U.S. District Judge Philip P. Simon wrote in his opinion. “As the bidding neared $3 million, the whole scheme unraveled.”
Scott won the auction and the museum shipped the car, but when it came time for Durham to deliver the title, he was unable to do so, having put the vehicle up as collateral for a loan to one of his companies, court records said.
Durham claimed he was unaware that a lending institution held the title to the vehicle. And whenever he was asked in depositions about the title and what he’d done to try to obtain it, Durham asserted his Fifth Amendment rights against self-incrimination, according to court documents.
The judge ruled Durham’s actions brought about financial harm. The Lyonses, Hyman and the museum have returned $2.13 million to Scott, but $1 million in proceeds is still in Durham’s possession, according to court documents.
Durham is no longer on the board at the ACD Museum, but the museum had to pay $30,000 to the trustee of an Ohio company embroiled in one of Durham’s schemes.
This month, the judge dismissed the remaining parts of the case and ordered Durham to pay back the $1 million.
According to the federal Bureau of Prisons, Durham is being housed at the McCreary prison in Pine Knot, Ky.