The U.S. Attorney’s office announced securities fraud charges against a 66-year-old Lowell man Thursday.
Richard E. Gearhart is charged with conspiracy to commit securities fraud, securities fraud and wire fraud, stated a news release from the U.S. Attorney’s office. Gearhart’s business partner, George R. McKown, 65, of Indianapolis, faces identical charges.
Federal authorities said Gearhart and McKown sold securities to individuals who transferred their traditional pensions, annuities, 401ks and cash to invest in their Schererville-based company, Asset Preservation Specialists Inc., and promised them a guaranteed rate of return.
Gearhart and McKown were not registered with the SEC or the State of Indiana to sell securities, according to the indictment.
“Gearhart had all the warning signs of a typical Ponzi scheme,” said Secretary of State Connie Lawson. “He took advantage of people he knew and wasn’t registered with my office to sell securities.”
Gearhart’s troubles began in 2013 when he filed Chapter 13 federal bankruptcy, according to court records. Several clients filed complaints against Gearhart in the bankruptcy case, claiming losses of more than $2 million collectively.
The indictment against Gearhart and McKown was the result of a joint investigation by the United States Postal Inspection Service, the Federal Bureau of Investigation and the Indiana Secretary of State Securities Division.
Jim Masters is a freelance reporter for the Post-Tribune.