Firm to Pay Up For Part in Ponzi Scheme
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Office of Indiana Secretary of State Connie Lawson says an Indianapolis-based accounting firm has agreed to pay $1.8 million for its involvement in a Ponzi scheme. The money will go toward paying back victims who were swindled out of more than $9 million by imprisoned former money manager Keenan Hauke. DeWitt & Shrader LP was the illegal fund's accountants. July 22, 2014
News Release
INDIANAPOLIS, Ind. – DeWitt & Shrader have agreed to pay $1.8 million to settle a lawsuit with Indiana Secretary of State Connie Lawson's office for their involvement as the accounting firm of money manager Keenan Hauke's Ponzi scheme. Keenan Hauke was a prominent money manager from Fishers who managed Samex Capital Partners LLC. He was sentenced to 10 years in prison in December 2011 for securities fraud. Although Hauke is now behind bars, the cleanup continues to try to return significant portions of investor losses, totaling over $9 million.
“While Hauke was the perpetrator of this scheme, DeWitt & Shrader gave his scam credibility,” said Secretary of State Connie Lawson. “As the fund's accountants, they had a responsibility to the investors to check Hauke's work before issuing client account and tax statements.
“The funds secured from this settlement will go towards repaying Hauke's victims. Helping Hoosier victims is always our number one priority and we will continue to work to maximize their restitution. There is still a condo in Barbados to be sold that Hauke purchased with investor money. We are working to finalize that sale now.”
The Secretary of State's office has worked to see $1 million dollars already returned to 97 investors and with this settlement, is projecting $2.25 million more. These funds have been recovered through asset freezes, liquidation of Hauke's accounts and clawback litigation against past investors who made fake profits off of Hauke's scheme. The Secretary of State's office has worked with the receiver, William E. Wendling, Jr. and counsel to the receiver, Scott Starr, to recoup as much money as possible for Hauke's investors.
In addition, several Hauke victims have also received money from the Secretary of State's Securities Restitution Fund. This fund helps victims of securities fraud recover a portion of their losses and was the first of its kind in the nation. Since its inception in July of 2010, over $42,000 has been returned to four separate Hauke victims. The Securities Restitution Fund is not supported by taxpayer dollars, but rather by fines and penalties assessed against those who violate Indiana's securities laws.
“Accountants or other licensed professionals who also hold securities licenses cannot afford to turn a blind eye if they see or suspect securities fraud,” said Securities Commissioner Carol Mihalik. “They have an obligation to take action and in this case, they did nothing.”
Source: The Office of the Indiana Secretary of State
