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The Canadian Press - ONLINE EDITION

Indiana's parachuting investor fled divorce, investigations

By: Allen G. Breed And Jay Reeves, THE ASSOCIATED PRESS

13/01/2009 6:40 PM | Comments: 0

HARPERSVILLE, Ala. - With his personal and financial worlds crumbling around him, investment adviser Marcus Schrenker opted for a bailout.

In a feat reminiscent of a James Bond movie, the 38-year-old businessman and amateur daredevil pilot apparently tried to fake his death in a plane crash, secretly parachuting to the ground and speeding away on a motorcycle he had stashed away in the pine barrens of central Alabama.

Now the search is on for Schrenker, who is running not only from the law but from divorce, a state investigation of his businesses and angry investors who accuse him of stealing potentially millions in savings they entrusted to him.

"We've learned over time that he's a pathological liar - you don't believe a single word that comes out of his mouth," said Charles Kinney, a 49-year-old airline pilot from Atlanta who alleges Schrenker pocketed at least $135,000 of his parents' retirement fund.

The events of the past few days appear to be a last, desperate gambit by a man who had fallen from great heights and was about to hit bottom.

On Sunday - two days after burying his beloved stepfather and suffering a half-million-dollar loss in federal court the same day - Schrenker was flying his single-engine Piper Malibu to Florida from his Indiana home when he radioed from 600 metres that he was in trouble. He told the tower the windshield had imploded, and that his face was plastered with blood.

Then his radio went silent.

Military jets tried to intercept the plane and found the door open, the cockpit dark. The pilots followed until it crashed in a Florida Panhandle bayou surrounded by homes. There was no sign of Schrenker's body. They now know they should never have expected to find one.

More than 350 kilometres to the north, at a convenience store in Childersburg, Ala., police picked up a man using Schrenker's Indiana driver's licence and carrying a pair of what appeared to be pilot's goggles. The man, who was wet from the knees down, told the officers he'd been in a canoe accident.

After officers gave him a lift to a nearby motel, Schrenker made his way to a storage unit he'd rented just the day before his flight. He climbed aboard a red racing motorcycle with full saddlebags, and sped off into the countryside.

Now, a search that began in the air and continued across land and sea been turned over to U.S. marshals.

"I believe he's out of the U.S.," Harpersville police Chief David Latimer said Tuesday. "He's already shown a mentality that's interesting to police. He jumped out (of) an airplane and left it to crash who knows where. He's shown a total disregard for human life. I think he'd do anything to get away."

Schrenker was head of an impressive slate of businesses. Through his Heritage Wealth Management Inc., Heritage Insurance Services Inc. and Icon Wealth Management, he was responsible for providing financial advice and managing portfolios worth millions.

By outward appearances, he was doing quite well.

He collected luxury automobiles, owned two airplanes and lived in a $4-million house in an upscale neighbourhood known as "Cocktail Cove" for its bevy of affluent boaters. In May 2000, he wowed onlookers by flying a special airplane at 435 km/h, three metres above the water and under two bridges in Nassau, Bahamas.

"This stunt should not be attempted by any pilot that wishes to stay alive," read the caption on a self-made video of the flight posted on YouTube.

He'd come a long way from his humble beginnings in northwest Indiana, where he and his two brothers were raised after their parents' divorce by their mother and stepfather, a Vietnam veteran who worked at U.S. Steel Corp.

But authorities in Indiana began investigating Schrenker's businesses following allegations that he sold clients annuities and charged them exorbitant fees.

State Insurance Commissioner Jim Atterholt said Schrenker would close the investors out of one annuity and move them to another while charging them especially high "surrender charges" - in one case costing a retired couple $135,000 on their original $900,000 investment.

The tangled web of Schrenker's financial affairs began to unravel more than two years ago.

The aviation buff had convinced dozens of active and retired Delta Air Lines pilots to allow him to manage their retirement accounts. In 2006, with Delta in federal bankruptcy proceedings, he convinced a group of pilots opposed to Delta's move to terminate their pension plan to let him help.

"He had a way about him - you trusted the guy," says David M. Smith, one of the retired pilots. "He was very credible. He talked a good story. So, we entrusted him with a task he never produced."

Two days before the Sept. 1, 2006, hearing at which Schrenker was supposed to testify about an analysis he had done on the pension plan's viability, he suddenly withdrew from the case.

"It happened very fast," Smith recalled. "He literally was a no-show. He literally just disappeared. We were shocked at the whole thing."

Smith believes Schrenker may have been running from a past unknown to many of his clients at the time, a past that was disclosed just days earlier in a deposition of him by a Delta lawyer.

According to the 156-page deposition obtained by The Associated Press, a judge in a 2003 bankruptcy case reported being "deeply concerned" that Schrenker was not disclosing thousands of dollars in monthly income to the court and not reporting the income on his tax returns.

In recent weeks, Schrenker's life had started to fall apart. On Dec. 31, officers searched his home, seizing the Schrenkers' passports, $6,036 in cash, the title to a Lexus and deposit slips for bank accounts in the name of Schrenker's wife Michelle, as well as six computers and nine large plastic tubs filled with financial and corporate documents. Just a day before, Michelle Schrenker had filed for divorce.

Schrenker's mother is just happy to know that he is alive. She hopes whoever finds him will treat him well and give him a chance to explain what he did and why.

"Sometimes we just all have too many problems," Marcia Galoozis said at her home outside Gary, Ind. "And I don't know what all his problems are, but sometimes we just don't think straight, get our heads twisted on wrong."

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