Financial Advisor Believed to Have Staged Death Faces Insurance Charges
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January 14, 2009 Wednesday 06:08 PM EST
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Financial Advisor Believed to Have Staged Death Faces Insurance Charges
Sean P Carr
INDIANAPOLIS
An Indiana businessman who authorities believe attempted to fake his own death in a plane crash was facing up to $240,000 in fines on year-old "churning" charges brought by the Indiana Department of Insurance at the time of his disappearance.
"We were surprised to see him go to such lengths to avoid our hearing, but we think there were other factors involved," Indiana Insurance Commissioner James Atterholt quipped.
Marcus Schrenker, 38, was picked up at a Florida campground on Jan. 13, two days after setting his private plane on autopilot, parachuting over Alabama and fleeing on a stashed motorcycle. The plane later crashed in an uninhabited swamp in the Florida Panhandle.
The financial advisor is facing a bevy of investigations and judgments over his business actions. For a year, Schrenker -- president of Heritage Wealth Management in Fishers, Ind. -- has been charged with eight counts related to the sale and marketing of equity-indexed annuities. According to the department's complaint, Schrenker misappropriated clients' funds and churned accounts: surrendering some annuities early, buying others and pocketing repeated transaction fees.
Schrenker is scheduled for a third and final administrative hearing on Jan. 22, a date set long "before the theatrics," Atterholt said. He "dragged the process out for some time," forcing the postponement of hearings due to pleas of health issues and, in one case, the firing of his legal counsel, the commissioner said.
If found guilty, Schrenker could be fined $10,000 for each of three violations per count, for a total of $240,000. He also faces the revocation of his license.
"I doubt he will attend, but we're going forward," Atterholt said.
The only change in the department's case since the highly publicized plane crash was that more potential victims came forward to file new complaints, which could be the subject of future hearings, the commissioner said.
Some of the life insurance companies Schrenker purchased annuity products from have stepped forward -- "to their credit," Atterholt said -- to help provide restitution to victims. The companies did not commit any wrongdoing, he said.
The U.S. Securities and Exchange Commission recently ruled that equity-indexed annuities should be regulated as investment products, not insurance products (BestWire, Dec. 17, 2008).
(By Sean P. Carr, senior associate editor, BestWeek: [email protected])
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