"I can't stand here and purport to feel what they feel. There are people who are severely hurt because of this," Morrison said.
FBI spokeswoman Laura Eimiller said Durham was arrested Wednesday morning at his home in West Hollywood, Calif. He was scheduled to appear in U.S. District Court in Los Angeles.
Cochran and Snow were arraigned Wednesday in federal court in Indianapolis and released, although they are required to wear electronic-monitoring equipment, U.S. Attorney Winfield Ong said.
James Voyles, an attorney for Cochran, declined comment Wednesday. Attorneys for Durham and Snow did not immediately return calls seeking comment.
Durham was president and chief executive officer of National Lampoon until Wednesday, said Cora Victoriano, a spokeswoman for the Los-Angeles based company that owns rights to the "Vacation" and "Animal House" movies. She declined additional comment.
SEC filings show Durham was named the company's president and CEO in December 2008.
The investigation into Durham's dealings has sparked calls for top Indiana Republicans, including Gov. Mitch Daniels, to return a total of more than $800,000 Durham donated to the party and candidates. Daniels, who received about $195,000 between 2003 and 2009, has said the money was spent and that there was nothing to return.
Court documents allege Durham, Cochran and Snow conducted an elaborate Ponzi scheme in which they used money from new investors to pay off earlier investors — then used investor proceeds to keep afloat their own unprofitable businesses, such as a car magazine, a race car team and a luxury bus-leasing business.
The documents also allege the men gave money to family and friends and used investor funds to maintain lifestyles which, in Durham's case, included a 30,000-square-foot Indiana estate, a yacht, private jets and a collection of classic and exotic cars. Among other expenses, the indictment alleges Durham used $250,000 of investors' money to upgrade his home's garage and wired himself another $150,000 for use at a casino.
The SEC lawsuit contends that by 2009, 90 percent of Fair Finance's investments were tied up in the alleged scheme. Federal officials said many of the victims were elderly Ohio residents.
"To add insult to injury, they squandered the stolen funds on such extravagances as multiple homes, a private jet, a yacht and more than 40 classic and exotic cars," Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement.
The FBI raided the offices of Fair Finance and his Indianapolis-based company, Obsidian Enterprises, in November 2009.
Morrison said it took prosecutors some 16 months to bring the indictment because investigators had to sift through thousands of documents, including bank accounts, internal company records and the companies' books.
Michael Welch, special agent in charge of the FBI's Indianapolis office, said the indictment alleges what would be the largest corporate fraud case the agency has ever handled in Indiana.
A bankruptcy trustee for Fair Finance told creditors in August that Durham had borrowed $54 million from the company and used the money for gambling, cars, artwork and political donations. The company has since filed for bankruptcy.