Investment Losses and Banking & Finance and Investing and Securities fraud and Law

Hauke fraud victims to get $1M in initial restitution

August 30, 2013

The Indiana Secretary of State's Office said Thursday the fraud victims of former money manager Keenan Hauke are set to receive $1 million in initial restitution.

Hauke, who managed Fishers-based hedge fund Samex Capital Partners LLC, was sentenced in July 2012 to 10 years in federal prison after pleading guilty to running a Ponzi scheme that defrauded 67 investors of $7.1 million.

More investors have been uncovered by the state since Hauke's plea agreement, bringing the total to 97 victims with more than $9 million in losses, the secretary of state’s office said.

The first $1 million in restitution is expected to be distributed on a pro-rata basis, a Secretary of State's Office spokesperson said Friday. Checks should be mailed by Sept. 13.

Carmel attorney William E. Wendling Jr., the receiver appointed by the state, will continue to pursue more funds for investors.

Hauke, for example, owns a condo in Barbados worth about $360,000 that has yet to be sold.

The receiver also filed suit against Hauke’s accounting firm, Indianapolis-based DeWitt & Shrader PC, in the hope of recovering more losses. The accounting firm has denied misconduct.

To date, $1.5 million has been recovered “through asset freezes, marshaling of other accounts and clawback litigation,” the state said.

Wendling said in court papers that about $535,000 was retrieved from investors who received payouts totaling more than their investments during a time when Samex was determined to be insolvent.

Some of the recovered funds are being used to pay the receiver, and the law firm and CPA firm he is using to help him in the recovery. Those fees have exceeded hundreds of thousands of dollars.

Hauke’s assets were frozen days after an investigation began into his fraudulent activities in mid-2011.

“Helping these Hoosier victims is our No. 1 priority and we will not stop until we have maximized their restitution,” Secretary of State Connie Lawson said in a prepared statement.

In addition to the $1 million distribution, four Hauke victims received a total of $42,000 from the Secretary of State’s Securities Restitution Fund, which was established in July 2010 to help fraud victims.
 

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