An Indiana financial adviser accused of trying to fake his death in a plane crash had been improperly moving money from accounts and forging signatures for several years, investors testified at a hearing Thursday.
An administrative law judge heard from investors who claim Marcus Schrenker bilked them out of hundreds of thousands of dollars before last week's plane crash in Florida, where he is jailed on federal charges stemming from the crash.
Schrenker pleaded not guilty Thursday in federal court in Pensacola, Fla., to charges of deliberately crashing his airplane and making a false distress call. Judge Roger Vinson ordered the 38-year-old amateur pilot sent for a psychiatric evaluation after Schrenker's attorney claimed he is not mentally competent for trial.
Tried to kill himself
Schrenker was arrested Jan. 13 at a campground near Tallahassee, Fla., where federal agents say he tried to kill himself after parachuting from his plane in Alabama and driving off on a motorcycle he had stashed nearby. His plane continued on autopilot for 200 miles before crashing in the Florida Panhandle. Authorities say he faced mounting financial problems and his wife had failed for divorce.
In Indiana, the state Department of Insurance has asked Judge Douglas Webber to permanently revoke Schrenker's license and fine him tens of thousands of dollars.
One investor, an 83-year-old Georgia retiree, testified Thursday that he had invested nearly all of his $1 million life savings with Schrenker, then later found $61,000 was withdrawn without authorization.
"It never did go to me, it went to him, to one of his accounts," said Thomas Reese of Atlanta.
Reese said it took 18 months for Schrenker to return the money — and that he stopped payment on one check and sent another to a wrong address.
Schrenker is accused of closing out annuities customers had bought and shifting money into new ones, leaving clients to pay high penalties and other unexpected fees.
No attorney or other representative attended the Indiana hearing on his behalf, and Webber allowed it to go on without him.
"I think it's reasonable to conclude that even if he were not incarcerated, he would not be willing to participate in this hearing," Webber said.
Troubles dating to 2002
At the hearing on his insurance license Thursday, Lisa Harpenau of the state Department of Insurance said troubles with the investors' accounts date from 2002.
"So we have roughly six years of misrepresentation," Webber said. "They should have a right to have this issue brought to a close."
Another investor, Gena Smith of Buford, Ga., testified that her father, William Hess, who died in February 2008, had written "not my signature" underneath where his name had been signed on an investment form with Schrenker, of the northeastern Indianapolis suburb of McCordsville.
In Indiana, Schrenker also faces two felony charges that he worked as an investment adviser without being registered. He also is named in more than a half-dozen lawsuits seeking millions of dollars in disputes over his financial dealings.