10:40am PT by Eriq Gardner
National Lampoon Sues Ex-CEO Tim Durham for Allegedly Embezzling 'Vacation' Money
National Lampoon, the company that started out as a Harvard-based humor magazine and went onto license many hit films, is looking to recover $1 million that it gained from a settlement with Warner Bros. over the popular series of Vacation movies starring Chevy Chase.
The targets of a lawsuit filed Thursday in Los Angeles Superior Court is former CEO Tim Durham, his attorney John Tompkins and the law firm of Brown Tompkins Lory & Mastrian.
In March 2011, Durham was indicted and arrested for securities fraud and conspiring to commit fraud. The FBI said Durham was running a Ponzi scheme, but he continued to serve as the company's chief executive until January 2012.
During his criminal case, National Lampoon entered into a settlement agreement with Warner Bros. and, according to the latest lawsuit, got more than $2.7 million to resolve a dispute over distribution of the National Lampoon's Vacation films.
In its lawsuit (read in full here), National Lampoon said that immediately after the settlement, Durham transferred $1 million out the company's bank account into the checking account of his criminal defense attorney's law firm.
The company says it never retained Tompkins and that its board of directors never approved the transaction.
Durham, once called the "Madoff of the Midwest," was convicted in June of 10 counts of wire fraud and sentenced to 50 years in prison.
He's now being accused of embezzlement and breach of fiduciary duty. His attorney is being sued for conversion, fraudulent conveyance and unjust enrichment.
National Lampoon, represented by Andrea Loveless, demands the $1 million back, plus interest, and legal costs.
Tompkins couldn't immediately be reached for comment.
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