Schererville investment manager accused of 'Ponzi-like' scheme

2013-10-22T19:09:00Z 2013-10-23T08:01:08Z Schererville investment manager accused of 'Ponzi-like' schemeMarc Chase marc.chase@nwi.com, (219) 662-5330 nwitimes.com
October 22, 2013 7:09 pm  • 

Richard Gearhart, of Lowell, owner of Schererville-based Asset Preservation Specialists Inc., filed for Chapter 13 federal bankruptcy in March of this year, Hammond federal court records show.

Since then, at least 13 former clients of Gearhart's business have filed a total of nine complaints in the bankruptcy case, alleging he convinced them to invest their retirement savings and assets in his scheme.

The clients collectively claim losses of more than $2 million, the complaints allege.

Gearhart's attorney, Shawn Cox, did not reply to questions sent by email to his office after a phone call from The Times seeking comment. Phones at Gearhart's business and residence were not accepting calls or messages Tuesday.

Several of the complaints indicate "Gearhart was operating a 'Ponzi-like' scheme aimed at divesting numerous investors out of their life savings and leaving them with no nest egg when they retire."

The complaints accuse Gearhart of preying on investors who already had suffered losses in the economic recession that began in 2007.

One of the former clients, Delores Hickman, 63, of Valparaiso, said she personally knew Gearhart for decades and trusted him to invest her retirement savings of about $56,000.

During a meeting in 2011, Gearhart told Hickman, who suffers from multiple sclerosis, that her 401(k) had suffered in the turbulent economy and advised her to roll her money into an IRA retirement account, Hickman's federal complaint states.

She ended up cashing out the 401(k) and investing the money with Gearhart as he had advised, with the promise of a 6 percent return in interest, Hickman told The Times on Tuesday.

But by February 2012, when she had not received documents or portfolios accounting for the investment, Hickman said she grew suspicious.

"When I didn't get that paperwork, it was a warning sign," she said.

Hickman said her calls to Gearhart either went unanswered, or he would quickly end the conversations with claims of heading to Bible study or other personal events.

Now Hickman said she is out the money she was depending on in retirement to help care for her illness.

A nurse of 30 years, Hickman had to leave her job in 2011 because of her advancing disease, she said.

"I was absolutely depending on that money," Hickman said.

Parties to the case told The Times on Tuesday that in addition to the complaints filed in bankruptcy court, the Indiana Secretary of State's Securities Division is conducting an investigation into the matter. Officials with the division could not be reached for comment Tuesday.

Hickman said she has been told that probe could take two years or more to complete.

Most of the other complaints by former clients of Gearhart are similar in nature to Hickman's, with alleged promises of between 6 and 8 percent interest on the investments.

In one case, a region couple claimed they were "financially ruined" after investing $1.2 million with Gearhart, court records state.

Another couple reported losing $250,000 — their life savings — in an investment with Gearhart, their complaint states.

The Owner of a Schererville investment firm is accused by former clients in federal bankruptcy proceedings of defrauding them collectively of millions of dollars in a "Ponzi-like" scheme.

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