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Flying high in Cocktail Cove

Marcus Schrenker had it all: money, a beautiful wife, a mansion in a ritzy neighborhood. So why did this financier, a pilot, put in motion a daring plan to fake his own death and hide a double-life, like investigators say he did?
/ Source: Dateline NBC

They seemed so perfect, this golden couple. He who soared so fast and high, she who dazzled down below. And their life?  Why, it was a dream come true. Their plentiful money appeared as if from thin air. And here in their mansion, French chateau style, they cared for their children, collected fine things, and lived well-earned success out loud.

In fact, it could be said, that on land, and in the water, and in the air, Marcus and Michelle Schrenker made waves - perhaps of envy, among those less lucky in life. And then? Ah, yes. Then.

The stage on which this bizarre play soared, then crashed, is itself a part of the story: a sort-of nautical cul-de-sac surrounded by the kind of places where a person can truly live large. The locals even have a name for it, a cheesy reflection of a less sober time, "Cocktail Cove." A little less frothy these days, perhaps, but once upon a time, particularly in a certain imitation chateau, it was shaken — and stirred.

On a weekend, in the warm summer sun, Cocktail Cove, on the Geist reservoir, outside Indianapolis, is the place to be. The lake is manmade, as is the life: the water sports, the boating, the sense of achievement, lubricated in suntan oil, new money, and an all-day happy hour. Former Indianapolis television personality Pat Carlini lives here.

Pat Carlini: About every other house has a pool, a hot tub, and a lot of parties. They have a lot of fun.  I think the people work very hard all week long.  It comes Friday, it's the weekend.  They wanna play.  They play hard.

Keith Morrison, Dateline NBC: And almost seems to remind you of, you know, a TV show or something.

Pat Carlini: That's been talked about a lot, the whole “Desperate Housewives” feel. They dubbed the street Wisteria Lane. I can totally see it, a reality show, the Geist Gals.

But there was one of those Geist gals Pat and the neighbors didn't see very often. Yet everyone seemed to know who she was: Michelle Schrenker. The attractive young wife of the well-to-do hotshot who built one of the biggest houses on Geist.

Michelle Schrenker: I mean, it's a nice, affluent neighborhood.

Keith Morrison: Bit of a Peyton Place? Secret backbiting going on, that type of thing?

Michelle Schrenker: Yeah, that can be said about it. Absolutely, absolutely. I'm usually the one they're talking about. {laughter} So....

Keith Morrison: And what do they usually say about you? 

Michelle Schrenker: Well, I don't know if it's so much about me.  It's more about my husband. I know the backstabbing that went on, and it's just not something I wanted to participate in.  I didn't want to be part of it.

Keith Morrison: From the beginning?

Michelle Schrenker: From the beginning, yes.

The beginning.  She met him one summer in the early nineties, while both were on summer break from Perdue University.

Michelle Schrenker: He was in town for a weekend, and just kind of caught my eye.  We had a lot of fun. Our first date, we went flying. Kind of a unique first date.  But a little scary at first.

It soon became comfortable.  They married in 1995.

Michelle Schrenker: I mean, I adored him. I mean, I really, really loved him.

He was a young man in a hurry.  In his twenties, Marcus launched a career as an investment adviser.  The business seemed to grow steadily. It had several names over time, including "heritage wealth management." 

Michelle Schrenker: I would just describe him as a financial adviser, who did portfolio management for affluent individuals.  That's the best way I could describe it. You know, he managed the business, and I managed the home.  You know?  And that's how it ran.

And that may be. But go back a few years, and take a look at the heritage wealth management Web site, circa 2005. There's Marcus (from Web site video: “Hi, I'm Marcus Schrenker”) with what now seems an oddly foreboding sales pitch... (From Web site video: "Your investments are your parachute.")

Then, there's Michelle.  (From Web site video: "Hi, I'm Michelle Schrenker, the Chief Financial Officer of Heritage Wealth Management.")

Michelle Schrenker: That was done, gosh, a few years ago, and each employee at the time did a little spot.  The dialogue was written by Marcus, and it was right from a teleprompter. Marcus wanted to create an image - it was done for marketing purposes.

Keith Morrison: A big company.

Michelle Schrenker: Yeah, just to make it seem bigger than it was at the time.

Michelle says she was really a stay-at-home mom focused on her children, and by all accounts, did a wonderful job:

Cindy Gooding: They had it all.  Beautiful children.

Friends like Cindy Gooding say the Schrenkers were a perfect family.  When she took the kids to lunch one day, a stranger stopped her:

Cindy Gooding: He said, "I have to tell you, your children are the most well-behaved children I have ever seen.” I started tearing up.  You know, I was so proud of them. That's the kind of family they were.

To some, that is.  But around Geist, in recent years, strange stories began circulating about Marcus.

Tom Britt: I would describe his personality as, you know, it's been described as Dr. Jekyll and Mr. Hyde. I could see that.

Tom Britt, who runs the popular Geist area newsletter and Web site, knew the Schrenkers, and liked Marcus.

Tom Britt: And it was just hard to believe, it didn't synch up with the guy that I knew. You know, there's a lot of stories and they're urban legends.  But you know, you hear so many of them, you have to believe at least one of them is true.  And if any one of them are true, you just think the guy's crazy.

And as the stories got stranger and stranger, questions began to percolate in the waters of Cocktail Cove.

In an upscale neighborhood known as "Cocktail Cove" near Indianapolis, a young investment adviser with big ambitions was making an even bigger name for himself. But it wasn't quite the reputation Marcus Schrenker might have wished. Pat Carlini lived nearby.

Pat Carlini: It seems like he just had run-ins with one neighbor after another."

Keith Morrison: Over what?

Pat Carlini: It could be the fact that somebody was building a house next to him.  And the stone on that house would look too much like the stone on his house.

That might sound like typical neighborhood pettiness. But to others, Marcus Schrenker had reputedly turned into the neighbor from hell. A pretty bad tenant, too. He rented office space at this building near his home.  Tom Britt runs the local newsletter.

Tom Britt: A couple years ago, he had an argument with his then-landlord.  The next day the guy wakes up and goes out to his dock and his boat isn't there.  And he gets a call from the fire department - saying that there was a boat registered to him that had gone over the dam and had crashed.  And nobody could ever pin it on Marcus.

All the while, Marcus was living the good life with his wife Michelle and their three children in their big house on the water.

Keith Morrison: What'd he tell you about that?

Michelle Schrenker: That he didn't do those things.  That it's ridiculous he did those things.

Four years ago, Michelle was by Marcus' side on the local news, after he sued the county sheriff's department for wrongful arrest following a dispute about one of his motorcycles.

Marcus Schrenker: He grabbed me and handcuffed me.  Threw me to the ground right here and basically wrestled me right here.

The sheriff's department denied any wrongdoing, and the lawsuit was settled. But on Cocktail Cove, there was something unsettling about Marcus' ability to grab the spotlight.

Michelle Schrenker: I know they always wondered about our income and that sort of thing.  I know there was a lot of talk about Marcus, but I just never...

Keith Morrison: Where, where do they get their money?

Michelle Schrenker: Yeah, but I just never paid much attention to it.

But others did.

Chris Proffitt: He made a big splash.  With the plane, flying over the reservoir, and buzzing people. I heard those stories.

Reporter Chris Proffitt of NBC affiliate WTHR in Indianapolis has covered the area around Geist for two decades.

Chris Proffitt: This was a guy that favored Armani suits. He had an attractive wife.  He had cars.  He had planes.  He seemed to have a really good life. I think it's become clear that Marcus wanted to give the appearance of success.

And did he ever. He had all the expensive boy toys a guy could want.

Michelle Schrenker: The things he bought are not things I use. I don't boat. I don't ride dirt bikes.  I don't like motorcycles.  I don't fly planes.

To Marcus, though, planes were the ultimate status symbols. And he loved to show his off: he'd even have a camera in the cockpit. He was a regular at airshows, where he could display his pilot skills, his daredevil streak.

For Marcus, planes were at the very center of everything. Look at the fullpage ad the Schrenkers did for a luxury car dealership: Marcus, Michelle, the Lexus, the airplane.

Michelle Schrenker: It was flattering that they asked us to do it.  I mean, it was nice. And we did it.  We may have gotten a Lexus there before and we knew the manager over there, who had lived in our neighborhood. So you know, it was no big deal.

No big deal.  Everything about Marcus Schrenker and his apparent success was no big deal.  He just seemed to rake it in. Despite some neighbors’ suspicions, there were few questions asked, few things out of place for this all-American success story of a family. But there was something a little odd a few years back.  In 2005, Marcus told his wife one day, out the blue, they were moving away, down South, to Atlanta.

Keith Morrison: How was the move?

Michelle Schrenker: It was hard.  It was sort of hard on me and hard on the kids to adjust, but we did it. And it wasn't a happy time.

The Schrenkers lived in another beautiful home in a gated subdivision bought for $1.65 million. It turns out Atlanta is home to thousands of pilots, and Marcus made a specific pitch to them on his Web site.  Marcus had entree in Atlanta. He already knew a pilot, Charles Kinney, and they became close.

Charles Kinney: I got to hold his baby. Play with his kids. We knew his family. He actually came to my parents' 50th wedding anniversary celebration.  Him and Michelle.

Some of Charles' family members invested with Marcus, as did pilot David Smith.

David Smith: We had a lotta fun. We went skeet shooting, we went down to see the shuttle launch. So we became pretty close friends rapidly.

Charles Kinney: His take is to get to know you at a very personable level.  And develop a friendship.  And he was very good at that.

But after 18 months or so in Atlanta, Marcus had another surprise for Michelle.

Michelle Schrenker: He woke up one morning and just said, "I've decided where I'm gonna buy a lot, in our old neighborhood, and we're gonna build a house and move back.

Before long, the Schrenkers were back on Cocktail Cove. Where did the money for the good life come from?  How did his business work?  Nobody seemed to know anything about it.  Even Michelle, to hear her tell it.

Keith Morrison: What did he do all day?

Michelle Schrenker: He managed it.  He made the trades.  He managed people's funds.  But I don't know. I didn't specialize in what he did. That was his business. My focus was not the business.  My focus was our family."

But Marcus was focusing on a new incarnation of the business. Heritage Wealth Management soon got a new name.  And Marcus called the man who runs the widely-read newsletter covering the Geist area. Look at this: a four page ad.

Schrenker's new company was called "Icon Group".  Had a nice ring to it.  It had offices in Indianapolis, and Sao Paulo, and Tokyo, and London - a far-flung empire.

Keith Morrison: But what'd you think when he put as the location of his company all the major cities in the world? I mean, come on.

Tom Britt: The way he portrayed it to me was he said that they were already established businesses and they were buying his business.  And he was just going to be managing and selling securities for him.

Life looked very good indeed for the Schrenkers last year, and remarkably, continued to look good even as markets the world over were collapsing.  And then, last fall, quiet signs of trouble.  Referring to Icon Group, he sent an e-mail to a friend saying "We have a compliance issue." Another said, "I've had to take some time off for stress."

And during the holidays, a close family friend got a phone call:

Cindy Gooding: I think it was Christmas Eve when another investor had contacted my husband and said, "Hey, something's just not right." And they did a little digging.

Christmas.  Joy was in the air around Cocktail Cove. But at the big house on the water? Well, joy would not be the word. Earlier, Michelle Schrenker had stumbled on a painful discovery.

Keith Morrison:  how did you find out?  How did he finally tell you?

Michelle Schrenker: He never really told me.  I caught him. And I saw him and her, going into the condo.

Keith Morrison: What'd you do?

Michelle Schrenker:  I confronted him.

An affair.  There was no denying it.  A woman from the local airport in which Schrenker had invested and where he spent a lot of time. In November, Michelle says, she filled out paperwork for a divorce but didn't go through with it.  The kids, she says, had been looking forward to a family Christmas.  A vacation.

Keith Morrison: Where were you gonna go on this family vacation?

Michelle Schrenker: Florida, to see his family...

Keith Morrison: So why didn't you go?

Michelle Schrenker: His parents got sick, and I said we'll just get a hotel somewhere and still go, and he said, well, we really can't afford it.

Can't afford it? The high-flying Marcus Schrenker couldn't afford a brief vacation in Florida?

Michelle Schrenker: "...and I said, "Okay fine, you know." And then a couple days later, ironically, he could afford to go to Key West. He could afford to go to Key West with his girlfriend. 

This is airport surveillance video from Dec. 29 showing Marcus and his girlfriend before leaving for Key West. And that, decided Michelle, was the end.  While he was away, on Dec. 30, 2008, she filed for divorce.  The next day, New Year's Eve, she was upstairs.

Michelle Schrenker: And my six-year-old came up and said Mommy, there's a policeman that wants to talk to you.

It was the last week in December 2008. Financial adviser Marcus Schrenker was in Key West, Fla. with his girlfriend. Back in the Indianapolis area, in the neighborhood known as Cocktail Cove, Schrenker's wife Michelle was brooding about the future.

On Dec. 30, Michelle filed for divorce from Marcus.  Next day, New Year's Eve, here at the big house on the Cove, wound slowly, through a gloomy afternoon. Marcus gone, Michelle on her own with the children.  And then the youngest, a boy, called out.

A policeman was at the door.

Michelle Schrenker: And I said, "He wants to talk to me? What are you talking about?  Where's the policeman?  And he said, "Downstairs.  He asked for Daddy, but he wants to talk to you." And they started yelling, "Mrs. Schrenker, get down here right now.  Right now."

In fact, several investigators had arrived, and they had a search warrant.  They went through the huge house room by room.

Keith Morrison: Do you think he knew, when he left to go on the little vacation with his girlfriend, that he was about to get raided?

Michelle Schrenker: I don't know for sure, but I felt like it. 

In fact, whether Marcus Schrenker knew it or not, regulators had been following a trail through his financial papers for the previous eight days.  Indiana Secretary of State Todd Rikita:

Secretary of State Todd Rikita: This started December 23rd for us. And it's been going at breakneck speed. So in one week’s time, we were able to get enough evidence to convince a judge to issue a warrant to go seize that property.

According to investigators, Marcus had been selling investments without a license. And they were finding, they say, other significant evidence of wrongdoing.

Keith Morrison: How much money's involved?

Todd Rokita: We're talking about millions.  But we're not talking about tens of millions. 

Criminal charges had not yet been filed, but Marcus knew the law was closing in. His personal problems were, too. And then? It was as if time suddenly began to spin faster and faster. Marcus returned to Indiana the first week in January. He stayed with his girlfriend at this condominium complex. Michelle called him about the divorce.

Keith Morrison: What was his reaction?

Michelle Schrenker: I think it was a surprise. And said he didn't want it.  He didn't want a divorce. "Please don't do this." Which I found very ironic.

Then, on Jan. 4, Marcus' stepfather died. He attended the funeral, but around Geist Reservoir and Cocktail Cove, the talk was about business.

Tom Britt: I got a voicemail on my cell phone and it was Marc. And he said, “Tom, I'm calling because something's happened to the company.”

On Jan. 9, Marcus was hit with a half-million dollar judgment in a federal lawsuit brought by an insurance company. He'd been holding on to commissions that he should have returned to the insurer. And over recent weeks, Michelle couldn't help but notice that Marcus was growing increasingly agitated.

Michelle Schrenker: And I would ask him what he's stressed about, and he would just say, “There's always somebody yelling at me.” But he would never elaborate.

Then, on Jan. 10, Marcus drove to Alabama, using a trailer to drop off a red motorcycle. Then, quickly, back to Indianapolis, and then, on the evening of Sunday, Jan. 11, he filed a flight plan for Destin, Fla.

Michelle Schrenker: Yeah, he told me he was going to visit his dad. And I didn't think much of it.

That evening, airport security cameras caught Marcus' pickup truck doing donuts on the snow covered tarmac.    They brought his plane out, and in his high-powered, $1.9-million Piper Meridian. Florida was less than three hours away.  It was 6:45 eastern time when he took off. Destination: infamy.

Michelle was home with the kids. It was around 9:00.

Michelle Schrenker: I got a call from an air traffic controller, from Alabama. And they said they needed his cell phone number. And I said, “Why?” and they said, “We lost contact with him.” And I said, “Is everything OK?” And they said, “Yeah, we just lost contact with him, and we're just trying to get ahold of him. “

And then an hour passed, and then another.

Michelle Schrenker: And then, about 12:30 in the morning, the Air Force called me, and started asking me questions about who owned the plane. And then I knew something was really wrong.

Oh, something was wrong, all right, dreadfully so.

It was supposed to be a routine flight. Or so its ordinary flight plan advertised.

On the night of Sunday, Jan. 11, a high-performance, single-engine turboprop belonging to investment adviser Marcus Schrenker was en route from Anderson, Ind., to Destin, Fla. Marcus was at the controls. Less than two hours into the flight, while the plane was somewhere over northern Ala., air traffic controllers received a distress call. 

It was Marcus. In a frantic voice, he told them his windshield had imploded, that he was bleeding profusely, and needed emergency help.

Then, nothing.

Controllers radioed back: land at the nearest airport. No response. The plane kept flying on...and on...and on.

From New Orleans, two f-15 fighter jets scrambled into the night, hoping to catch up with the unresponsive plane as it hurtled towards the Gulf Coast, and the sensitive military installations near Pensacola.

Soon, in the Florida Panhandle, an emergency call came into the Santa Rosa county sheriff's department. It was from a military air traffic controller.

Sgt. Scott Haines: As it started to unfold, it started becoming very obvious that this was something that was very bizarre.

Residents heard sonic booms, saw flares lighting up the sky. Word was a pilot was in big trouble.

Later, back home in Indiana, in the big house on Cocktail Cove, Michelle Schrenker was trying to comprehend what was wrong, getting calls from air traffic control and the military, asking who might have been flying on Marcus' plane.

Keith Morrison: They wouldn't tell you why they were calling, other than that?

Michelle Schrenker: They said they were looking for him.

Keith Morrison: They couldn't find him.

Michelle Schrenker: Uh-huh, so they were looking for him.  And I asked what happened.  And they said, We're just looking for him.  He got off the radar.

Within an hour, another call came in from the Air Force.

Michelle Schrenker: By then I was crying and I said, “You know, what's going on, I mean has something happened to him? You know, what's going on?” And she asked if I had family there.  And I said, “No, I've got three sleeping kids.”

Then, finally, near Pensacola, Fla., confirmation: In a place strangely reminiscent of Cocktail Cove, a plane had, in fact, crashed.

Sgt. Scott Haines: And I knew something was odd right away, because there were military aircraft-- jets circling ahead. 

Now a ground search was on. It took nearly an hour to get to the crash site.  It was Marcus' plane.  Was marcus alive, or dead?

Michelle Schrenker: Somewhere in the three o'clock area, my doorbell rang and a sheriff and a colonel rang my doorbell. Finally knew. I mean, I just started shaking, cause I knew when they come to your door it's not good.  And they said, “Are you Mrs. Schrenker?” And they said, “Your husband's plane has gone down,” and my knees kind of gave out underneath me.

But that wasn't all.

Michelle Schrenker: And he said, "But his body isn't in the plane, which is good, so we're still looking for him.”

No body?  What could possibly have happened?  Could he have been thrown from the plane?  Somehow survived and walked away from the crash into the swamplands of Florida?

Scott Haines, Sheriff's Dept.: When we got there with the dogs, we didn't locate any blood.  We didn't locate any imploded windshields, such as the emergency call stated. That's when we realized that something was definitely not right with the situation.

As Monday morning dawned, Indianapolis TV reporter Chris Proffitt heard about the crash in Florida.  He called Tom Britt, the man who runs the local newsletter.

Chris Proffitt: I said, “Do you know that Marcus Schrenker's plane went down in Northwest Florida last night?”

Tom Britt: I knew something was up, my immediate radar went up.

Chris Proffitt: “He says this guy would fake his own death. I’m positive of it.”

In the early morning hours of Monday, Jan. 12, 2009, at the big house on Cocktail Cove, Michelle Schrenker tried to focus. Her estranged husband's plane, she's just been told, had crashed in a Florida swamp.

But the plane was empty.  No Marcus.

Michelle Schrenker: It'd been a roller coaster.

But hundreds of miles to the south, investigators were finally sorting out the bizarre details. Those sonic booms and flares some people reported near Pensacola overnight were from the F-15 fighters which had scrambled to take a look at Marcus' unresponsive plane.

Sgt. Scott Haines: We find out from the military pilots that were up there, that when they flew along next to this aircraft, that the doors were already open. And the cockpit appeared dark and empty, they said.

A pilotless plane? It sounded too weird, too eerie, to be true. Then, more surreal news.

Michelle Schrenker: The colonel got a call and I said, “Well, did you find him?”  And he said, “Yeah, he's alive. And apparently he parachuted out.”

Parachuted out? It seemed too far-fetched. But according to federal authorities, the night before, at about 2,000 feet, above Alabama, Marcus jumped out the door of his plane and pulled the rip cord. A pilot who abandons a perfectly healthy airplane?

What other conclusion but this:  Marcus Schrenker must have tried to fake his own death. Then, waiting at home, Michelle got some news: he'd been spotted.

Michelle Schrenker: He went to a house, and told 'em, he was in a canoeing accident. And I was dumbfounded.

But it was Marcus. Sopping wet from the knees down, he'd made it to a highway, hitched a ride to a motel. Then, he took off on that red motorcycle, which he'd stashed away two days earlier; he'd stored it near the motel. And a manhunt was on.

Michelle Schrenker: I didn't know if they were going to arrest him, shoot him, you know, what was going to happen.

At this KOA campground near Tallahassee, a motorcyclist  pulled in a few hours later.

Carolyn Hastings: Real friendly. Asked for a tent site. Needed electricity. I assumed he had a laptop with him, needed internet access.

Owner Caroline Hastings said the motorcyclist went online for awhile, then began to act quite strange. Back in Indiana, tom Britt was checking his messages.

Tom Britt: And I checked my e-mail and an e-mail pops up from Marcus Schrenker.

There it was: an e-mail from Marcus.

He wrote that he really did have a window implode in flight, said he lost consciousness. Said he still loved Michelle and how sorry he was for treating her so terribly. He also said, "I have embarrassed my family for the last time and by the time you read this, I'll be gone."

Keith Morrison: So do what you think?

Tom Britt: Well, my initial reaction was I have to assume the worst and he's really gonna take his life. I know the walls have been caving in around him. And the first thing I do is I call the police.

At the KOA campground, the next day, Caroline Hastings and her husband drove by the motorcyclist's tent.

Caroline Hastings: My husband pulled up on the golf cart, and noticed some red tinge on his tent, that he didn't see the night before.  So, he got an uneasy feeling.

The sheriffs came then.  The U.S. Marshals service, too.  They opened the tent. It was a ghastly sight.

Caroline Hastings: Blood. Lots of blood. Right around the time that the ambulance was pulling in, they walked over to say, “Yeah, he had sliced a wrist, and they didn't think he'd make it.”

It was Marcus. On the Internet the day before, he'd learned his plane crashed on land, had been found, identified. If he had tried to fake his death, he'd blown it. He was rushed by a flight for life helicopter to a nearby hospital.  He'd almost made good on the cryptic threat in the e-mail. While Marcus recovered, officials in Indiana were pursuing their case against him.

Lisa Harpenau: I would say he's the Madoff of Indianapolis.

Investigators say Marcus simply pocketed some of the money he was supposed to be investing for his clients. And there was more:

Lisa Harpenau: I looked at the documents, I looked at the evidence, and I thought, wow, if these allegations are true, we've got a serious situation here.

Investigator Harpenau had heard from Marcus' old pilot friends in Atlanta.

David Smith: When the light goes off, you realize, oh, my God, I've been had.

When Harpenau poured through the pilot’s documents, she found that Marcus had taken their investments, and shifted them from one annuity to another each time earning a handsome commission, and each time passing on huge fees to his unsuspecting pilot clients. It's a practice known as "churning."

Charles Kinney: We're talking about surrender fees of hundreds of thousands of dollars.

Lisa Harpenau: They'd find out their nest egg, which they've been working on for years, is dwindling. Quickly.

Investigators say Marcus' alleged wrongdoing is a perfect example of what's known as "affinity fraud."

Todd Rokita, Indiana Secretary of State: You're gonna see it a lot in a bad economy.  It's not fraud by a stranger.  It's fraud by a family member, a church member, someone who runs in your social circles.

Michelle Schrenker: I mean all these things started coming in that I had no knowledge of. Just complete and utter shock. And all these things that I had no idea about.

Keith Morrison: It was a house of cards.

Michelle Schrenker: Yeah.

Keith Morrison: And you didn't know anything?

Michelle Schrenker: No. 

Even around Cocktail Cove, no one yet seems to know the extent of Marcus' alleged fraud. Or how many friends have been taken in.

Cindy Gooding: It's over $100,000.

Cindy Gooding was one of Marcus and Michelle's closest friends, godmother to their youngest child.  She and her husband say even they were ripped off by Marcus, the dashing young man they loved like a son.

Cindy Gooding: It's wrong. Who has the right to take anything from someone else they haven't earned? That's just wrong.

Earlier this year, Michelle Schrenker was left at the big house on the Cove with her three children. Along with all of Marcus' assets, her assets were frozen, too. And she says she's penniless.

Michelle Schrenker: I'm left holding a bag with everything.

Keith Morrison: And whether or not it's true, you feel like maybe that was his intent.

Michelle Schrenker: Yes.

But there was a bigger question: Did Michelle Schrenker just enjoy the proceeds, or was she in her husband's alleged schemes up to her eyeballs???

Here she was this past March, out in the rain, literally and figuratively, and, according to her, holding the bag. Michelle Schrenker's estranged husband Marcus was the one in custody, accused of bilking clients and then attempting to fake his own death.

The state of Indiana had frozen Marcus' assets. And in a civil case, a judge ordered Marcus to pay more than half a million dollars in fines and restitution to victims of his annuity scheme.  Michelle's assets were frozen as well.

She, however, claimed she was utterly penniless, had to rely on gifts from friends even to buy food for her three children. 

She felt like a virtual prisoner, she said, here in the big house on cocktail cove.

Michelle Schrenker: "I have nothing.  I have nothing of my own."

But not everyone was quite so sure Michelle was a victim. Investigator Lisa Harpenau:

Lisa Harpenau, Indiana Dept. of Insurance: I believe that she very well knew what was going on, and if she didn't know what was going on, then she intentionally turned a blind eye."}

So, like Ruth Madoff, the wife of fraud king Bernie Madoff, Michelle fought back against the idea that she was a party to any fraud.

Michelle Schrenker: These funds went other places, not to me. I know that I haven't done anything.

Keith Morrison: A lot of people don't believe you.

Michelle Schrenker: I know.

Keith Morrison: They vilify you.

Michelle Schrenker: Uh-huh.

Keith Morrison: They think you're lying. They think you must have been in on it.

Michelle Schrenker: That's unfortunate. I mean, I don't know what else to do but tell the truth and that's what I'm doing.

Keith Morrison: Did you know he was in trouble with the law?

Michelle Schrenker: No.

Keith Morrison: Did you know his business was tanking?

Michelle Schrenker: No.

How could she not have known? Michelle says it's because all she could think about back then was her husband's extra-marital affair:

Michelle Schrenker: My mind was occupied with keeping my marriage and my family together, and making sure my children are okay. ‘Cause my family was in complete turmoil.

But years earlier, in that Web site promo tape, Michelle certainly seemed to have a hand in running the firm. She says she simply read from a teleprompter.

Keith Morrison: So as you read from the teleprompter the script that he wrote for you, did you at any point say, uh, Marcus, I don't do that stuff?

Michelle Schrenker: Yeah, a little bit.  But I just kind of go along with it, and you think it's not hurting anything.

Todd Rokita: She was the chief financial officer of his company. And she lived a beautiful life.

Indiana Secretary Of State Todd Rikita: The ill-gotten gain that this family lived on, for years, is reason to try to get the assets that are left back into the hands of those who have been hurt. 

Indeed, there are some eyebrow-raising checking account records. Around the holidays, including the very day she was dealing with her divorce, Dec. 30, and the day her house was raided, Dec. 31, she cashed out more than $70,000 from the corporate account.

Keith Morrison: You made some withdrawals from the bank accounts, during that period, like $5,000 here, $10,000 there, and so on.

Michelle Schrenker: Well, they weren't withdrawals. They were just transfers he had asked me to make to other accounts, prior to the end of the year, to get bills paid.

Keith Morrison: You see, though, people will see numbers on a page they'll say, “Aha! I see what's going on. She's stealing money from the company because he's taking off with a girlfriend, and she's gonna get a divorce and she's kinda squirreling away some money to get the hell out of there.”

Michelle Schrenker: I can understand why people look at it that way, but that's not what happened at all.  Not at all.

Outside court one day, Michelle cast herself as a victim  - as much of a victim as any of Marcus' clients.

Keith Morrison: Does it worry you sometimes when you're trying to go to sleep at night, that because of this title of CFO, you could spend time in jail, lose your kids, lose everything?

Michelle Schrenker: I worry about it, but I know I haven't done anything. I haven't done anything. I went in and I paid some bills. And I had a title. I didn't act as a CFO. That is not what I did at all.

Michelle's attorney, Mary Schmid: The fact that she had the title of CFO and not the duties of an acting CFO makes a huge difference. Her duties were to go into the office a couple days a week, pay bills from whatever accounts Marcus told her there were funds to pay with, and go home and be a Mom.  

She'll still be a mom, but not here. In July, Michelle and the kids had to move out of the big house on Cocktail Cove. Neighbor Pat Carlini:

Pat Carlini: I think he has about two million into it. They wanted 1.6 and I think they got just over 1.1 million.

Keith Morrison: Bargain basement price.

Pat Carlini: It was a bargain. It was a steal for somebody.

Pending a judge’s approval, the proceeds are going to repay fleeced investors. As for Michelle, we caught up with her a few weeks ago in downtown Indianapolis.

Keith Morrison: How are you hanging in there?

Michelle Schrenker: I'm just-- taking it a day at a time.

Turns out Michelle wanted to talk to us again.  Especially about these documents from the Schrenker investigation.

In interviews with investigators, Marcus' former business associate,  a whistleblower in the case, said that when it came to Michelle's chief financial officer job, "It is just like I had, a glorified title where I was just a support person".

When asked if Michelle had training or experience, the whistleblower said, "As far as I know, my impression of Michelle is a victim."

Michelle Schrenker: That's the most important thing for me to get out.  Because that really does exonerate me, and that's what I've been trying to do for so long, that's the part of the story that I've been trying to get people to understand about me.  And I've known they've had it for so long, and I've just been hoping it would surface.

And then, in a written statement last week, the spokesperson for Indiana's Secretary of State Todd Rikita confirmed "Officially, she is not being charged at this time."

Michelle hopes her name will be cleared.

Keith Morrison: What would you say to people about a situation like this?

Michelle Schrenker: I wish people wouldn't judge so quickly.  You know, I've-- you know, guilt by association is not always true.  And I-- you know so many people have been judging me based on the fact-- that it's, you know, what they've read in a newspaper or--

For Marcus Schrenker, it's another story. Last week, he was sentenced to more than four years in prison after he pleaded guilty to federal charges of crashing his plane intentionally and making a false distress call.  In an emotional statement, Schrenker apologized to his family, air traffic controllers, and residents of the area where his plane crashed and narrowly missed several homes.

"To this day I cannot believe I could do something so reckless and selfish," he told the judge. And soon, he'll be moved to Indiana to face nine new security fraud charges on top of two charges he already faced.

They flew so high, and then it all came crashing down.

Keith Morrison: You know him probably better than anybody, in spite of the lies.   What happened to him?

Michelle Schrenker: I wish I knew.  I don't know.

Keith Morrison: Did he want too much?  Were his ambitions too big?

Michelle Schrenker: I can only guess, trying to fill holes with things.  I don't know, ‘cause it sure wasn't buying happiness.