Pilot Who Faked Death Indicted

A financial adviser has been indicted on federal charges that he intentionally crashed his airplane in Florida to try to fake his death.

A federal grand jury Tuesday also indicted 38-year-old Marcus Schrenker with making a fake distress call. His arraignment is Thursday and he remains jailed.

Authorities say Schrenker had slashed his wrist before agents found him on Jan. 13 hiding at a campground near Tallahassee. They discovered him two days after his small plane crashed in a northern Florida swamp.

Authorities say he parachuted out over Alabama and fled on a stashed motorcycle.

In his home state of Indiana, he is charged with working as an investment adviser without being registered. He also is the subject of more than a half-dozen lawsuits in several states. Schrenker handled lucrative accounts for years despite repeated accusations that he was bilking investors.

Regulators in at least three states were warned about Marcus Schrenker, in one case as early as 2002.

But it took nearly seven years - and suspected losses reaching into the millions of dollars - before Indiana launched a criminal investigation of Schrenker, whose high-flying lifestyle included planes, luxury cars and a 10,000-square-foot home. Officials say he deliberately switched his licensing from state to state to create confusion about who should have been watching him.

Schrenker's wife filed for divorce Dec. 30, a day before Indiana police served a search warrant on his home and office, seizing computers, tubs full of financial documents and evidence of recent document shredding. This was within days of his losing a $533,000 judgment to an insurance company.

He was being held Monday in the Escambia County Jail, though a court date had not been set. Federal court records did not list an attorney for him.

Felony charges from his financial dealings are pending in Indiana, where authorities have frozen Schrenker's assets and those of his wife. He also faces nearly $9 million in potential and actual judgments and legal claims, some filed in other states, on complaints that he failed to refund unwarranted commissions and charged exorbitant fees.

"That guy's house of cards is falling rapidly," said Charles Kinney, an airline pilot from Atlanta who has made formal complaints that Schrenker scammed up to $135,000 from his parents' retirement fund. "We knew this day was coming."

Authorities in Indiana and Georgia have received at least nine complaints since 2002 against Schrenker and his companies - Icon Wealth Management, Heritage Wealth Management and Heritage Insurance Services. A financial industry regulatory group says there were two other complaints filed in 2001.

Georgia's insurance department worked with five people who filed complaints over Schrenker's handling of annuities - including charging exorbitant "surrender fees" the investors didn't know they'd face - starting in late 2006, said spokesman Glenn Allen. The department eventually obtained $2.5 million in refunds for the investors, working with insurance companies that issued those annuities.

Former Indiana securities commissioner Mark E. Maddox filed a complaint with state regulators in 2002 alleging Schrenker misappropriated about $700,000 from one client. Maddox, an attorney who represented that investor, said Schrenker misappropriated the money with steep penalties and new commissions for himself by improperly switching the man's money between mutual funds.

That investor eventually recovered about $500,000, but no official action was taken against Schrenker. Maddox raised concerns about Schrenker again in September after learning he had opened a new business, "but we just couldn't get anybody to do anything about it."

Current securities commissioner Chris Naylor said state investigators found no evidence "to warrant criminal or civil actions" in the 2002 case.

In the summer of 2007, frustrated by their inability to get criminal charges filed against Schrenker in Georgia or Kentucky, Kinney and the other investors in his group contacted Indiana's Department of Insurance, where he said a law clerk finally took their complaints seriously.

Lisa Harpenau, now an attorney with the department, said the case now has eight counts alleging misappropriation, forgery and unwarranted annuities fees, and more victims have come forward since Schrenker's arrest. The department plans a hearing Thursday on whether to permanently revoke Schrenker's Indiana insurance license.

And the state's securities division is investigating a complaint it received in December 2008 that led to the current Indiana charges against Schrenker.

Jack Stone, who moved into an Indianapolis home near Schrenker after winning an $8 million Indiana lottery prize in 1997, will be watching. He said he lost $150,000 of his winnings through fees from unauthorized mutual fund changes but got two-thirds back from his smooth-talking neighbor after hiring an attorney.

"I tell you, the guy's a con," Stone said. "He's a nice guy if things go his way, but he's a con."