Money Manager That Committed Suicide Suspected in $10 Million Ponzi Scheme

 Indiana authorities are seeking to freeze the assets of a Kokomo investment advisor who recently committed suicide amid suspicions he ran an elaborate Ponzi scheme with potential losses of at least $10 million. According to the Indiana attorney general's office, Richard Schwartz, who committed suicide in August 2013 shortly after authorities began an investigation, may have left behind sizeable assets that can be used to repay investors, including a $13 million life insurance policy. Indiana Secretary of State Connie Lawson has stated that some of Schwartz's victims include former NFL players.

Schwartz was the owner of RAS & Associates ("RAS"), a Kokomo financial services company that offered wealth management services to clients and sold life insurance through Schwartz's affiliation with New York Life. The Indiana Attorney General believes that Schwartz persuaded clients to liquidate their insurance holdings in order to place their funds with Schwartz, who touted different investments carrying higher rates of return. In total, authorities believe Schwartz raised at least $10 million from investors.

However, Schwartz was terminated from New York Life last year due to a negative ledger balance that New York Life indicated represented "compensation credited to Schwartz for policies which were rescinded, declined, not issued, canceled, surrendered, foreclosed, expired, or reduced and replaced with new policies.”  After authorities began an investigation in July 2013, Schwartz committed suicide in late August at a million-dollar estate in Simpsonville, Kentucky believed to be his home. Authorities recently discovered the existence of a $13 million life insurance policy belonging to Schwartz, thus prompting the commencement of litigation. Details as to the viability of the policy remain unknown, but any payout could be used to compensate victims.

Victims are urged to contact the Indiana Secretary of State's securities division at 317-232-6681 or the state’s securities fraud hotline, 800-223-8791. 

For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.

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