Updated: Sunday, 23 Aug 2009, 10:02 PM EDT
Published : Sunday, 23 Aug 2009, 10:02 PM EDT
CENTRAL INDIANA (AP) - Authorities say the troubled Indiana money manager who tried to fake his own death in a plane crash to avoid financial ruin had built his investment businesses on the backs of people he knew - acquaintances, a friend of 10 years and even his own aunt.
But his clients didn't know he had sold them a nonexistent foreign currency fund, created false account information and used their money for personal expenses, investigators say.
Marcus Schrenker, 38, was sentenced Wednesday to more than four years in federal prison on charges stemming from the Jan. 11 plane crash in Florida. But his legal problems are far from over - he faces 11 felony counts tied to his financial dealings in Indiana, and each carries a penalty of two to eight years in prison. Indiana authorities have not yet made arrangements to bring Schrenker back to Indiana, but they expect him within the next few weeks.
Indiana Secretary of State Todd Rokita, whose office has been helping with the investigation, said Schrenker bilked friends and relatives out of about $1 million.
"It is especially heinous, but unfortunately this is a classic case of what we call affinity fraud - fraud that's committed upon us by those we've come to love and trust," Rokita said. "They're able to separate us from our money because of that special relationship."
Officials said Schrenker does not yet have an attorney in the Indiana cases but could be appointed a public defender once he's back in the state for a court appearance.
A probable cause affidavit says Schrenker's victims include his aunt, Rita Schilling, who transferred $230,000 to one of Schrenker's investment companies in August 2008. Schilling became suspicious of problems with her accounts in 2009 and found that more than $20,000 had been transferred in 2008 to an account belonging to another one of Schrenker's companies - a move prosecutors say never should have happened. Schilling declined to comment.
Schrenker is also accused of taking money from a friend of 10 years, Charles Black, who had Schrenker manage his investment accounts starting around 2003. In 2004, Schrenker moved $100,000 out of Black's account without his consent, the affidavit says. When Black and his wife discovered it, they called Schrenker and he moved it to a cash account.
The affidavit says Schrenker had Black write a check in 2007 as part of a transfer of money into what turned out to be a nonexistent fund.
Many of Schrenker's clients weren't initially suspicious because they either knew Schrenker personally or heard about him through trusted colleagues or friends, prosecutors said. Schrenker's alleged deception was made easier since he had all the trappings of success, said Jeffrey D. Wehmueller, administrative chief deputy for the Hamilton County prosecutor's office.
Schrenker was an amateur daredevil pilot whose high-flying lifestyle included planes, luxury cars and a 10,000-square-foot home in an upscale suburban Indianapolis neighborhood nicknamed "Cocktail Cove," where affluent boaters often socialized. But when the economy started tanking, some investors wanted to stash their money in safer investments and take it out of Schrenker's accounts.
Schrenker said during his federal sentencing Wednesday in Pensacola, Fla., that his life was out of control and he didn't know what he was doing when he got into his plane Jan. 11.
His wife had filed for divorce Dec. 30, a day before Indiana police served a search warrant on his home and office. They seized computers, financial documents and evidence of recent document shredding, all within days of his losing a $533,000 judgment to an insurance company.
He admitted putting his plane on autopilot and pointing it toward the Gulf of Mexico in an attempt to fake his own death, but the plane ran out of fuel and crashed in Florida. Schrenker parachuted into Alabama and was found two days later at a Florida campground, bleeding of a self-inflicted wrist slash.
"When times are good, you have no reason to question it," Wehmueller said. "When people want a safer investment, they start asking for their money back. When the money's not there, that's when the schemes tend to unravel."
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