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Wednesday, June 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

Lampoon Claims Ex-CEO Lifted $1 Million

LOS ANGELES (CN) - A former CEO embezzled $1 million from National Lampoon and sent it to his criminal defense attorney's law firm, the Lampoon claims in court.

National Lampoon sued former CEO Tim Durham, of Kentucky; his attorney John Tompkins, of Indiana; and Tompkins' law firm, Brown Tompkins Lory & Mastrian, in Superior Court.

National Lampoon claims Durham swiped $1 million and wired it to Tompkins, who represented him in an SEC Ponzi complaint against Durham.

The National Lampoon was a humor magazine published from 1970 to 1998. It was incorporated in 1986 and now produces movies, radio, and stage shows.

In its complaint, the Lampoon claims that Durham, "a substantial shareholder," took over as its CEO in December 2008 after the previous CEO, Daniel S. Laikin, resigned.

On Nov. 24, 2011, "the Federal Bureau of Investigation raided Tim Durham's Monument Circle offices because the FBI was investigating him for running a Ponzi-type scheme in Ohio," the complaint states.

It continues: "On Tuesday, March 14, 2011, Durham was indicted and arrested for securities fraud, wire fraud and conspiring to commit fraud. While Durham continued as CEO of National Lampoon, from April 2011 through January 2012, Durham was under house arrest at his home in Indiana."

While Durham was under house arrest, the Lampoon claims, he signed a settlement agreement and release between it and Warner Bros. Among other things, the agreement "purported to resolve a dispute between the parties concerning Warner's distribution of the National Lampoon Vacation pictures and Warner's accounting methods, calculations and allocations as well as providing National Lampoon with an advance in the amount of $2,705,448, recoupable from National Lampoon, Inc.'s share of the National Lampoon Vacation pictures," according to the complaint.

National Lampoon claims Durham swiped some of the money as soon as the transaction was complete.

"On July 28, 2011, immediately after the settlement money from Warner Brothers hit National Lampoon's business checking account, Durham instructed Comerica Bank to transfer $1,000,000 out of National Lampoon's business checking account into Durham's criminal defense attorney John Tompkins's law firm account," the complaint states. (Bank account numbers omitted.)

The complaint continues: "On July 29, 2011, Comerica confirmed that the wire was processed in wire number 010486 to the beneficiary of John Tompkins.

"John Tompkins nor Brown Tompkins Lory & Mastrian were never retained by National Lampoon, Inc., and never performed any work for National Lampoon, Inc.

"The July 28, 2011 wire transfer of $1,000,000 was not approved by the Board of Directors of National Lampoon, Inc., nor was it properly authorized in accordance with National Lampoon, Inc.'s corporate bylaws.

"Durham resigned as CEO in January 2012.

"On or about June 20, 2012, Durham was convicted in U.S. District Court in Indianapolis of 10 counts of wire fraud, one count of securities fraud, and one count of conspiracy, and on November 30, 2012, Durham was sentenced to 50 years in prison."

National Lampoon claims that "Tompkins and Brown Tompkins Lory & Mastrian knew Durham was misappropriating and converting funds and encouraged his actions."

The Lampoon says it did not learn about the embezzlement until April 2012.

It seeks $1 million, plus interest, and damages for embezzlement, breach of fiduciary duty, conversion, fraudulent conveyance and unjust enrichment.

It is represented by Andrea Loveless of Laguna Hills.

In March 2011, the SEC charged Durham and two alleged co-conspirators with running a $230 million dollar Ponzi scheme through Akron-based Fair Finance Co. According to the SEC's complaint, Durham and the two other men used the money they stole from investors - many of whom were elderly - to buy "luxury items," including million-dollar yachts, expensive cars, and private jets, and to cover gambling and credit card debt.

In December 2008, the SEC filed charges against ex-CEO Daniel Laikin, claiming he conspired to inflate National Lampoon's stock prices. Laikin allegedly paid at least $68,000 in kickbacks to corrupt stock promoters "to create the illusion of an active market and induce other investors to buy it," according to Courthouse News's coverage of the complaint.

Laikin pleaded guilty to conspiracy, and was sentenced to 3 years and 9 months in federal prison in September 2010, according to publicly available information.

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