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Hamilton County man arrested for investment scheme

December 5, 2014

A Hamilton County man was arrested Thursday after a federal grand jury indicted him on charges of criminal wire fraud, securities fraud and money laundering.

John K. Marcum, 50, already was facing civil charges from the Securities and Exchange Commission for allegedly defrauding investors of about $6 million in a scheme that targeted retirement savings.

The arrest came after a joint investigation by the Federal Bureau of Investigations and the Internal Revenue Service’s Criminal Investigations department.

Marcum faces up to 50 years in prison and fines of more than $5 million if convicted.

In 2010, Marcum founded the investment firm Guaranty Reserves Trust LLC, which operated in the Indianapolis area.  The SEC said Marcum helped investors set up no-fee individual retirement accounts and gained control over their retirement assets, saying he would earn them significant returns by day-trading in stocks while guaranteeing the safety of their principal investment. However, the SEC said, Marcum did little actual trading and lost money when he did.

“Defrauding people of their hard-earned retirement savings is criminal behavior,” said Acting United States Attorney Josh J. Minkler in a written statement after Thursday’s arrest. “The indictment demonstrates that Marcum used investor’s retirement accounts as his own personal piggy bank to fund his lavish lifestyle.  Anyone who does that will face the full force of federal criminal prosecution.”

The U.S. attorney’s office said Marcus solicited millions of dollars from 16 investors from 2010 to 2013. He told investors that he represented celebrity clients and traded very conservatively, investigators said.

He used much of the investment money to finance a personal line of credit, on speculative start-up ventures, cars, vacations and gifts.

Marcum could not be reached for comment Friday morning.



 

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