I’m a bit suspicious of this story about Marcus Schrenker, the failing investment manager who tried to fake his own death. A quick websearch couldn’t find any relationship between Heritage Wealth Management, Icon Wealth Management, and Bernard Madoff Investments. And it’s very possible that Schrenker was just a greddy little bastard like madoff whose scheme was uncovered in the wake of the stock market devaluation.
An investor who had entrusted money to an Indiana financial manager suspected of trying to fake his own death in a plane crash said Tuesday he had complained to state regulators that the man was unfairly charging high fees and pocketing the money.
The complaints were yet another sign that Marcus Schrenker’s life was crumbling around him in the weeks before he took off in his small plane, then apparently parachuted out over Alabama before leaving the plane on autopilot to crash in Florida.
The Indiana Department of Insurance had filed a complaint against Schrenker on behalf of seven investors last January that claimed he cost them more than $250,000 because he never told them they would face high fees to switch annuities. Investors said he cozied up to their families — then betrayed them.
“We’ve learned over time that he’s a pathological liar — you don’t believe a single word that comes out of his mouth,” said Charles Kinney, a 49-year-old airline pilot from Atlanta who went to regulators on behalf of his parents, who invested $900,000 of their life savings with him.
A hearing in the case was scheduled for next week, when his license in Indiana could be revoked for life and he could face penalties. On Tuesday, prosecutors alleged Schrenker had been advising clients even though his license had expired on Dec. 31, and a judge ordered him arrested on financial fraud charges.
Kinney said Schrenker became so close with his parents that he even vacationed with them at their Georgia lake house. But he claims Schrenker never told his parents that a transaction to transfer their money to a deferred annuity would cost them more than $135,000 in “surrender penalties.” Later, his brother discovered $60,000 was missing from his father-in-law’s account — something he said Schrenker explained by saying the money was in complex financial statements.
Schrenker’s disappearance has perplexed authorities in three states as they scrambled to put together the pieces of what looked like an elaborate plan sketched out to escape financial doom. In the days before the crash, Schrenker’s home and business had been searched by authorities probing his financial management businesses, his wife filed for divorce, his stepfather died and a court in Maryland entered a half-million-dollar judgment against him.
The case took another cinematic turn Tuesday, when investigators said it looked like Schrenker had stashed a red motorcycle in an Alabama storage unit before the crash, then retrieved it and fled.
The mystery began Sunday night, when Schrenker’s plane went down en route to Destin, Fla., from Anderson, Ind. Schrenker had reported that the windshield imploded and that he was bleeding profusely, officials said.
After he stopped responding to air traffic controllers, military jets tried to intercept the plane. They noticed the door was open and the cockpit was dark, following it until it crashed in a bayou surrounded by homes. Authorities said he apparently put the single-engine Piper Malibu on autopilot for more than 200 miles, bailed out over Alabama and left the plane to crash in Florida.
Investigators think Schrenker’s plan was to let the plane fly to the Gulf and crash in the water, slowing the investigation, Latimer said. But the plane ran out of fuel first.
Police in Childersburg, Ala., southeast of Birmingham, later said they picked up a man using Schrenker’s Indiana driver’s license and took him to a motel. The man was wet from the knees down and told the officers he’d been in a canoe accident.
Yogi Patel, owner of the Harpersville Motel, said the man was given the key to room 114, and he didn’t act strangely at all. “He didn’t leave a mess. He didn’t leave anything. He didn’t even take a shower,” he said.
By the time police learned of the crash investigation and came back to the hotel, the man was gone. They learned he paid for his room in cash before putting on a black cap and running into the woods next to the hotel.
Later, another clue surfaced: Schrenker had parked a red Yamaha motorcycle with packed saddlebags in a storage unit about 7 miles away from Childersburg. By Monday, the motorcycle was gone and Schrenker’s still-damp jeans, wet gray socks, hiking boots and a T-shirt were in a trash bin nearby, authorities said.
Meanwhile, in Indiana, Schrenker’s neighbor Tom Britt said he received an e-mail Monday night from Schrenker claiming the crash was an accident and saying he wanted the companies under investigation to succeed. Britt believes the e-mail is real, but its authenticity hasn’t been verified.
Britt quoted Schrenker as saying, “I embarrassed my family for the last time” and “By the time you get this, I’ll be gone.” Britt turned the e-mail over to authorities, fearing it was a suicide note.
Authorities in Indiana were probing Schrenker’s financial management businesses — Heritage Wealth Management Inc., Heritage Insurance Services Inc. and Icon Wealth Management — for possible securities violations, said Jim Gavin, spokesman for Indiana’s secretary of state. Officers who searched his home Dec. 31 were looking for computers, notes, photos and other documents related to those companies, he said.
On Friday, two days before the crash, a federal judge in Maryland issued a $533,500 judgment against Heritage Wealth Management Inc., and in favor of OM Financial Life Insurance Co. The OM lawsuit contended Heritage Wealth Management should return more than $230,000 in commissions because of problems with insurance or annuity plans it sold.
The Coast Guard said he could be billed for the cost of the hunt, and Florida officials say he might face a host of charges there. The plane crashed into a bayou surrounded by homes, and residents feared the damage could have been far worse. “You just can’t let an unmanned aircraft just maliciously fly into a residential area without facing any consequences,” Santa Rosa County Sheriff’s Office spokesman Scott Haines said on the CBS “Early Show.”
I’m sure we’ll see more of these things as time goes by. The market devaluation is just beginning to flush them out.