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Criminal liability of Marcus Schrenker
The business world has been the unfortunate recipient of criminal behavior by some of the most accomplished people in its word. This is to mean that men in position have let their greed direct their actions with regard to how they conduct business. This has culminated in a negative image of the business executives in a time then economy is experiencing some harsh and unstable times. Unscrupulous business executives will never cease to exist. This is verity of the issue. As such, it is upon the government and the business world to set up measures that can make the identification and prosecution of such individuals easier and quicker. This will significantly aid in the safeguarding of the investor interests. One such unscrupulous business executive is Marcus Schrenker who squandered millions of investor money. Using various illegal actions, he catapulted into the limelight when he attempted to fake his demise. Through a series of events, he was captured. In the end, the court saw it fit to hand him a sentence of ten years in jail. With this being said, this paper has endeavored to provide analysis of the criminal action attributed to Marcus Schrenker.
In the year 2009, Marcus Schrenker initiated a series of events that would see police in three different states search for the now missing man. It is vital to point out that Schrenker was the president of a firm known as Heritage Wealth Management. This firm was located in the region of Indianapolis. At the time of his daring escape, his firm had been in financial disaster. In addition to this, Marcus had been in the middle of a nasty divorce settlement. As it might be seen, Marcus’ life had been in a mess. This is with reference to both his private and professional life. Given this dire situation, it is not surprising that Marcus decided to attempt to get out of this mess by faking his own death. The sad part is that he had opted to lie to his investors regarding the state of their investments. To this end, Marcus decided to fly his plane over Southern Alabama. The unique action that Marcus did was the decision to eject himself from the plane while it was still in flight mode. He then parachuted to the ground from his plane. He had first put the plane in autopilot before ejecting himself from the plane. In the end, the plane crashed into the Florida panhandle. This crash initiated a man handle for the man who has misused millions of investor funds to sustain his lavish lifestyle (New York Times, 1).
Marcus Schrenker has to be among the most colorful financial scammers to hit the business world since time immemorial. It is vital to point that Marcus had been suffering from bipolar disorder. The exact impact of this physical ailment is not immediately clear to this paper. At the time of his capture, he had been 39 years of age. The main charges that were level against him were the stealing of $1.5 million of investor money and attempting to fake his own death (Duray, 1). Scherenker had been so audacious to the extent that he wore a parachute, jumped out of the plane to the safety of the ground. While on the ground, he located his motorcycle and rode off to the sunset oblivious to the chain reaction that he has instigated involving the police. The primary motivation that he had was the need to evade the police investigation in his three wealth management businesses.
Marcus Schrenker exploited his smooth talking abilities to exploit his investors. This is as per information collected from his friends pertaining to the general physical traits that enabled to realize success (FOX News, 1). He went to great lengths to assure his investors of the steady returns that their investments would have if they invested in his business. Marcus had been of significant power with regard to the overall amount of funds over which he had been made in charge. His three companies had made him the manager of a multi-million dollar fund. It has to be understood that the large reason for his dwindling fortunes is sourced from his apparent lack of action and carelessness. As an investment manager, these qualities are significantly detrimental.
Marcus started to experience a dwindling of fortunes resulting of carelessness and the lack of action with regard looking out for his investors. The first of these actions was his apparent failure to inform seven of his investors for the fact that a change in annuities would culminate high fees being paid. This was a bad enough decision. He, however, had to compound this fact by making another serious error that cost his firm a loss of $ 250,000. With these errors, in 2008, a complaint was lodged against him from The Indiana Department of Insurance. This culminated in a launch of investigation into the nature of his business practices amidst fears that he had been engaged in unethical business practices. The final nail of the coffin was the expiration of his financial adviser’s license. This, in turn, instigated a need for an investigation in the way he conducted his businesses. It is vital to point out that rather than stand up and face the consequences of his actions, he opted to try to flee. As evidence of his callous nature, he came up with a plan of action that is best defined as movie-like (FOX News, 1).
When he was caught, the initial charges were hinged on his miserable attempt to fake his demise. These charges were also combined by the desire to have him pay for the costs of the rescue operations that had been set up in an endeavor to save his life. As such, to this effect, he was sentenced to four years in jail. Upon his sentencing, he was awaiting the charges regarding securities to be filed. It is saddening to realize that this additional prison sentence could have been evaded if he had just decided to stick around and try to defend himself in the case regarding securities fraud. It should, however, be understood that his life spiraled into a pile of mess with the loss of a federal case against one of his businesses that had been located in Maryland. With the decision of the court, it was a foregone conclusion that his assets would be frozen come December of that same year (NBC NEWS, 1).
The entire escape plan had been genius. This is until one appreciates the role of military interceptors that had been set up following the devastating impacts of 911. As such, as soon as he had informed the authorities he was in distress, military interceptors had been sent out to check on the situation. On arrival, the interceptors clearly saw that the side panel door had been opened and revealed that no one was in the plane (NBC NEWS, 1). Thank God, for such advancement in technology that within minutes of informing air control, there had been military interceptors next to the plane. The sad part is that Schrenker had not the decency to put the plane on autopilot so that it crash in an unpopulated region.
Marcus had lied to both his investors and the police with regard to his state of affairs. His degree of lying is best exemplified by the extent to which he wrote the apparent suicide note. He even had the Gaul to lie to his friend and neighbor. What is even more surprising is the fact that the Alabama police had also been dimwitted to believe the lies that Schrenker handed them with regard to his accident. Schrenker had lied that he was involved in a canoeing accident. Sadly, the police believed this web of lies concerning the way in which Schrenker had come to wet his trousers from shoes to the knee. Apparently, Schrenker’s landing had not been as smooth as he had envisioned. He landed in the water. Thinking that all was over; he boarded his bike and sped off to the sunset. What had not been put into perspective was the fact that those who were looking for him with regard to his securities fraud would be looking for him. In addition to this, he had not relied on the FAA taking his distress signal very seriously. As such, this failure to think his escape plan through culminated in him leaving a clear and easy trail to follow leading up to his capture.
In addition to the charges brought against him as a consequence of his faking o his death, there were an additional nine charges that were leveled against the former securities adviser. The charges were mainly hinged on the fraudulent sale of securities (FOX News, 1). These new charges are classified as being class C of felonies. As such, if found guilty of any of these charges, he will get a sentence of two to eight years. These nine additional charges are in addition to the two felony counts that had been leveled against him in the start of the year 2009.
The vast amount of charges that were brought against Marcus is a significant pointer to the amount of work that the office of the prosecutor had put in with regard to this case. Marcus, in addition to the counts filed against him with regard to faking his death, had been charged with a total of eleven felony charges. This shows the seriousness with which the government approaches the issue of fraud attributed to unscrupulous business people. Then again, the vast amount of charges can be used as an indicator of the extent of the financial misdeeds attributed to Marcus Schrenker.
Schrenker used rather genius approach to deceiving people into investing in his wealth management fund. It has been pointed out earlier that he was a cheat and very cunning smooth talker. These can be understood as functioning to create a foundation of sorts for his goal of defrauding his investors of millions. The main mode via which Marcus exploited the naivety of his investors was via the sale of unauthorized foreign fund. This meant that the investors had a false sense of security of their investments. In the long run, this fund had been illegal and thus culminating in the loss of millions of dollars of the pension funds of their hard earned money. The second means via which Schrenker was able to maintain his lavish lifestyle is via the action of creating and maintaining information of accounts that were rather false. As such, he was able for so long weave through this web of false information. This means that there was not any one time when investors knew the truth about the state of their money. The third and most devastating way in which he committed securities fraud was via the use of the funds sourced from his clients for his own personal use. This meant that the lavish lifestyle he lives, the planes he owned and the $1.7 million house that he owned were all directly financed by his investors. It is essential to point out that, through all this web of lies, his investors had been ignorant of what had been going on.
Despite the fact that this saga took place in the year 2009, Schrenker and subsequently his business had been under investigation since the December the previous year. Indiana’s securities fraud had been investigating Schrenker and his financial services for some alleged securities fraud. This was instigated by a claim that had been logged against his financial services with some his former clients. In an attempt by the office of the prosecutor to recover the lost funds of his clients, the office has sought and subsequently received a freeze on all Schrenker’s personal and business assets (New York Times, 1). This was motivated by the desire to aid the investors to recoup some, if not the full amount, of their lost funds as a result of reckless and unethical business practices that had been attributed to the head of the wealth management business. Throughout the entirety of the case proceedings, Schrenker’s assets remained in receivership. It is via this way that, investors can be assured of the motivations propelling the government to aid them in receiving back their money. This is even if the amount received will not be in the full amount that they had earlier invested. Marcus had the audacity to con some of his closest friends. This was via convincing them that they should invest in a virtual fund, which he guaranteed a return on their investment.
It is via these funds that were sourced from some of his closest family relations and friend that he used to sustain the lie of the existence of a virtual fund. In the last of his flimsy attempts to stay afloat, he conned a total of nine clients. These were inclusive of a friend of ten years in addition to his own blood related auntie. The total amount, which he was able to accrue from these nine clients, was $ 1.5 million (NBC NEWS, 1). It is rather interesting to note that one can source such a massive amount of money from just nine clients. It seems that being a hedge fund manager does, in fact pay well. These nine people had been of mind that they were building their asset base in a potent fund. What they were oblivious of was that the fund was non-existent and that they were just financing Schrenker’s coffers.
The whole scheme came into light with the deterioration of the economy. Aware of the fact that they could lose their hard-earned money, the investors somehow opted to invest in other way that had better guarantees for a return on these investments. As such, given this rise in the number of investors who were in need of their money, it was soon clear that Schrenker had been defrauding his clients of their money (FOX News, 1). He had also just lost an insurance claim of one of his three businesses. The loss was to an insurance company. When he was apparently unable to give his investors their money back, some opted to report him to the relevant authorities who in turn launched an investigation on how he had conducted his business.
In his defense, there were several trivial attempts to try to dissuade the judge from giving him a long sentence. One of these reasons was that he had already been medicated for his bipolar disorder and had now been cured. The second reason was that giving him a long sentence would be tantamount to punishing his children. The judged, rather obviously, hog washed all these reasons. The main reason given for this was that all the factors that enabled Marcus to defraud his clients would come back again. As such, their current absence could not be used a rationale that there will never occur in the future (FOX News, 1).
Schrenker received what can best be described a fair sentence. In the current sentence, the court ruled that he would finish the remaining three years before starting on serving the next ten years of his federal sentence. In addition to these ten years, the court also ruled that he would have to undergo probation in the next four years after completion of his prison sentence. The terms of probation were such that Schrenker would not work in the field of financial management. This is compounded by the fact that he has to seek counseling. The court ignored the calls of the defense that a lighter sentence would enable him to make up for the wrongs he had made to society as a whole.
Schrenker has reiterated his desire to repay his investors. He defended his actions by pointing out that at the time of his arrest he had been experiencing the worst of his bipolar disorder. As such, during his arrest he had been in a downward spiral of sorts as a result of a buildup of stress and an addiction to pain killers. In the entirety of the case, he had been in the middle of a divorce. Probably his wife had the sense of getting out of the marriage at the time that she did. This, however, did not stop the court from placing their joint assets under receivership. In the end, Schrenker had agreed to serve ten years in jail. This is in addition to agreeing to pay about $600, 000 in restitution. This deal was motivated by the willingness of the prosecutor to drop four charges. When Schrenker is eventually released from prison, he will be facing the daunting task of paying millions of dollars worth of the court-ordered judgments.
References
Duray, Dan. “Marcus Schrenker, Hedge Funder Who Allegedly Tried To Fake His Own Death, Is In Custody (VIDEO).” The Huffington Post. TheHuffingtonPost.com, 13 Jan. 2009. Web. 12 Dec. 2013. <http://www.huffingtonpost.com/2009/01/13/marcus-schrenker-hedge-fu_n_157515.html>.
FOX News. “Timeline: Marcus Schrenker Plane Hoax Mystery.” Fox News. FOX News Network, n.d. Web. 12 Dec. 2013. <http://www.foxnews.com/story /2009/01/14/timeline-marcus-schrenker-plane-hoax- mystery/>.
New York Times. “A Man With Everything, Including a Lot to Flee .” New York Times. N.p., 14 Jan. 2009. Web. 11 Dec. 2013. <http://www.nytimes.com/2009/01/15/us/15plane.html?_r=0>.
NBC NEWS. “Cockpit items led cops to missing financier.” msnbc.com. N.p., n.d. Web. 12 Dec. 2013. <http://www.nbcnews.com/id/28623108/#.UqlsmF1XqAh>.
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