A local businessman has been charged with securities and wire fraud, and conspiracy to commit securities fraud, federal authorities announced Thursday.
George R. McKown, 65, of Indianapolis, is accused of taking part in a Ponzi-like scheme that robbed numerous investors of their retirement savings.
According to U.S. Attorney David A. Capp of the Northern District of Indiana, McKown and Richard E. Gearhart, 66, of Lowell, sold securities to individuals who transferred their traditional individual retirement accounts, pensions, annuities, 401(k)s, and cash to Gearhart and McKown.
Defendants were “guaranteed that their original investment was safe and sound and promising a guaranteed rate of return,” investigators said.
The investments were made through a Schererville-based company, Asset Preservation Specialists Inc., which was owned by Gearhart. The company declared Chapter 13 bankruptcy in 2013.
Gearhart and McKown were not registered with the Securities and Exchange Commission or the state to sell securities, authorities said.
The state did not say how many investors lost money or how much money was lost. Federal indictment records were unavailable Thursday afternoon.
According to a story on NBC Chicago5’s website, at least 10 individuals accused Gearhart of swindling them of almost $3 million between 2009 and 2012.
One alleged victim, Delores Hickman of Valparaiso, told the Northwest Indiana Times that she lost $56,000 in retirement savings to Gearhart. Hickman and other victims said they were promised annual returns of 6 percent to 8 percent on their investments.
One couple said they invested $1.2 million with Gearhart and another said they lost $250,000, the Times said.