by CNN
Published: Tue, January 13, 2009 - 7:43 pm CST
(CNN) -- Missing Indiana financial manager and pilot Marcus Schrenker is a smooth talker who promised investors steady returns on their money, said two former commercial pilots named in an Indiana Department of Insurance complaint.As police hunt for Schrenker, who they believe attempted to fake his death by bailing out of his plane over Alabama, those who knew him shared stories of a charming man with lofty promises.
Joe Mazzone and Charles Kinney said they trusted Schrenker because he came highly recommended by other pilots.
"It was all word of mouth, and when you're a pilot, you trust. That's what you do and what you're used to doing," said Mazzone, 57, of Auburn, Alabama. "His modus operandi is, he flies into your city dressed up in a thousand-dollar suit and sits down with you, buys you lunch, and the next thing you know, he has you on his side, and you move your money to his Heritage Wealth Management."
A judge in Indiana froze Schrenker's assets at the request of investigators looking into his business dealings. The order also applies to Schrenker's wife, who was seeking a divorce, and his three companies: Heritage Wealth Management, Heritage Insurance Services and Icon Wealth management. Those companies are "the subjects of an active investigation by the Indiana Securities Division," said Jim Gavin, spokesman for the Indiana secretary of state.
"You'd think nothing would surprise you any more," Jim Atterholt of the Indiana Department of Insurance said Tuesday. "We'd be less than honest if we didn't tell you this was a shock and anybody who's going to jump out of an airplane to avoid one of our hearings next week ... it's certainly unusual to hear."
Schrenker, 38, took off from Indiana for Destin, Florida, on Sunday night. He told air traffic controllers that his windshield had imploded. Then, authorities believe, he parachuted out of the aircraft, which crashed in East Milton, Florida. Watch what fighter jets saw when they pursued the aircraft »
Schrenker approached a home in Childersburg, Alabama, telling residents he had been in a canoeing accident. Police, who identified him using his pilot's license, took him to a hotel in nearby Harpersville. But after hearing about the crash, they found that he had used a fictitious name to check in and was gone.
Authorities say they later found that he had stashed a motorcycle in a storage facility in Harpersville, again using a fake name and saying he would retrieve it Monday. Police think he used it to leave town.
"Hundreds of thousands of dollars are at stake -- in upwards of a million dollars, potentially more," Atterholt said. "We've had folks calling since they've seen the media coverage of this story, we've had new folks calling, and we don't know the scope of the damage that he has done or alleged to have done."
Schrenker was licensed, he said, and allegedly was defrauding investors through annuities.
"When you have an annuity and you sell it, there are a lot of penalties that the insured incurs, and the first time you buy an annuity, the agent makes a very nice commission," Atterholt said. "And so every time he sells a new annuity, he gets a nice commission. So it's a double hit for the consumer and a nice bump for the agent."
Kinney, 49, of Norcross, Georgia, said he befriended Schrenker in 1996.
"This guy was the most charming guy you'll ever meet," said Kinney, who allowed Schrenker to manage his money starting about 2003. Kinney then encouraged his parents to invest about $2 million with Schrenker.
"This guy was family to me," Kinney said. "He's a fantastic nice guy. He's well-spoken. His customer service was impeccable. You call the guy on the phone, you would get him.
"He told my parents that they were investing in various insurance products, but they didn't really know what that meant. I didn't really know, either. We trusted him," Kinney continued. "He said this is a safe place to put money, to avoid all the world's dangers like terrorism and impending doom and gloom associated with it.
"In that climate, back then, you bought it. You believed him that he would protect your money."
Both pilots say Schrenker gave them vague explanations about where their money was invested. Kinney and Mazzone said Schrenker assured them that he was not making commissions on their investments and that the pilots and their families would receive only one statement each year showing returns.
But Schrenker's business dealings, and the upcoming hearings with state officials, seemed to be getting to him, according to friend and neighbor Tom Britt.
"He always seemed a little stressed," said Britt, who said he has known Schrenker for four or five years.
Schrenker's wife, Michelle, filed for divorce in Hamilton County Superior Court on December 30, according to the Herald Bulletin in Anderson, Indiana. A hearing was set for February 5.
Britt told CNN affiliate WRTV in Indianapolis, Indiana, that the couple has two young sons and a daughter and that Schrenker was involved in school activities.
Once insurance companies found out about Schrenker's activities, Atterholt said, they have been attempting to help the consumers.
"They were not working with him, but they were trying to fix the problem after it occurred," he said. The department is seeking fines against Schrenker and the revocation of his license, Atterholt said.
"This gentleman, if these allegations are true, he's clearly a crudball," he said. "Anyone who would do this to their friends and neighbors and be so brash about it deserves the full penalty that's coming to them."
Attorney Lisa Harpeneau said she took the call from Kinney in August 2007, and he told her "we had a rogue agent in the state of Indiana."
However, Schrenker is also accused of defrauding people outside of the financial arena. A suit filed in January 2008 in Houston County, Alabama, accuses him of misrepresenting the condition of an aircraft he sold to a local man.
Schrenker told Barnett Hudson that the 1996 Extra Flugzeugbau Ea 300L aircraft was "squawk free," had "exceptional maintenance" and had "never been damaged," according to the suit.
But Hudson says he later learned that the plane had made a "hard landing" and that a wing had been overstressed, and that Schrenker had made a $104,000 claim with his insurance company for damage to the plane but made only cosmetic repairs.
The suit claims that the defendants, including Schrenker, "breached their express warranty by selling an aircraft that was not squawk-free ... had been damaged and was not fit to even be flown, given the internal damage to the wing."
Plane Crash Near Milton
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