An administrative law judge in Indianapolis on Friday permanently revoked the Indiana insurance license of a financial adviser accused of bilking investors before trying to fake his death in a Florida plane crash.
Judge Douglas Webber’s order means neither Marcus Schrenker nor one of his companies, Heritage Wealth Management Inc., can ever again hold insurance producer’s licenses in Indiana.
Webber’s signed order comes a day after he heard testimony from investors who said Schrenker forged signatures on investment documents, charged exorbitant fees and removed money from their accounts without authorization, costing them hundreds of thousands of dollars.
The daylong hearing before Indiana Department of Insurance investigators yielded “overwhelming” evidence to revoke the licenses, Webber said.
“I do not want him ever to sell or be able to approach anyone about an insurance product based on a license,” Webber said.
Although Schrenker voluntarily surrendered his Indiana licenses last summer, the insurance department’s chief of investigators, Nikolas Mann, had sought to permanently pull his licenses.
Webber is expected to rule in about a month on Mann’s request to impose $270,000 in fines against Schrenker and order him to pay $320,000 in restitution to his victims.
Schrenker remains jailed in Florida, where he pleaded not guilty last Thursday to charges of deliberately crashing his airplane Jan. 11 and making a false distress call.
He was arrested Jan. 13 at a campground near Tallahassee, Fla. 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.
A federal judge in Florida ordered the 38-year-old amateur pilot sent for a psychiatric evaluation after Schrenker’s attorney claimed he is not mentally competent for trial.
The New York Post reported Friday that Schrenker claimed he has been under psychiatric care and on medication for more than a year and doesn’t remember parachuting from the plane.
“It’s just crazy. I’ve never even jumped out of a plane before,” Schrenker told the newspaper in telephone interviews from jail. “I sit and stare at the walls and wonder what happened and say, ‘How did I get here?”‘
At the time of the crash, Schrenker was facing mounting legal problems, including a divorce filing by his wife. He faces two felony counts in Indiana alleging that he worked as an investment adviser without being registered and is named in more than a half-dozen lawsuits seeking millions of dollars.
At least two of the lawsuits stemmed from grievances investors brought to the Indiana insurance department, which filed a civil complaint in January 2008 accusing Schrenker of closing their annuities and shifting money into new ones.
The state claims the switches, a tactic known as “churning,” left investors to pay high penalties they hadn’t known they’d face while Schrenker earned lucrative commissions. Officials said he also charged steep adviser fees.
More complaints have come in since Schrenker’s arrest.
Mann said Schrenker misrepresented the annuities his clients invested in and misappropriated their money as part of a pattern of “brash, arrogant and reckless” behavior.
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