A once-prominent Indiana money manager acknowledged
that he operated a Ponzi scheme that defrauded investors out of at least $7
million. Keenan Hauke, 40, pled guilty to a single charge of securities
fraud, which carries a maximum prison sentence of twenty-five years and a
$250,000 fine. Authorities were tipped off by a former business associate
of Hauke, who had formerly appeared on financial channels including CNBC, appeared
in Bloomberg Markets, and penned a regular column for nine years in the
Indianapolis Business Journal. According to the plea agreement between
Hauke and prosecutors, the sentencing judge would be prohibited from handing
down a sentence exceeding 17 years.
In 1999, Hauke formed a hedge fund, Samex Capital
Partners LLC ("Samex"), in which he acted as chief executive officer.
After engaging in dozens of disastrous real estate investments that
sustained heavy losses, Hauke generated false account statements listing
purported investments and constant returns. Hauke then split up the fund
into two groups - the Brokerage Group and the Real Estate Group. The
fund's legitimate operations were moved into the Brokerage Group, while the
ill-performing real estate investments were allocated to the Real Estate Group. However, instead of engaging in legitimate trading,
Hauke used new investor money to pay returns of principal and
interest to existing investors. Hauke also misappropriated investor funds
to sustain a lavish lifestyle, including the purchase of a condo in Barbados.
Earlier this year, the Indiana Securities Division filed
a civil suit against Hauke accusing him of operating a Ponzi scheme, and
obtained the appointment of a receiver to recover assets for the benefit of
defrauded investors. The receiver, William Wendling, says he has recovered
approximately $1.6 million for the benefit of investors by seizing Hauke's bank
accounts and selling possessions including gold and silver coins.
Additionally, Hauke's Barbados condo may yield up to $400,000 at an
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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