Cops: Pilot Who Faked Death In Custody

Man Who Apparently Crashed Plane, Escaped On Hidden Motorcycle Was Facing Numerous Financial Fraud Charges

(CBS/AP)  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 police say the man has been arrested in northern Florida, ending a three-day search.

U.S. Marshals spokesman Michael Richards says Schrenker was apprehended around 10 p.m. EST Tuesday in a tent at a campground in Quincy, Fla.

Richards says one of Schrenker's wrists was cut, but he's alive and in custody.

Schrenker was on the run 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," Charles Kinney, a 49-year-old airline pilot from Atlanta told CBS' The Early Show. Kinney alleges Schrenker pocketed at least $135,000 of his parents' retirement fund.

Authorities in Indiana were probing Schrenker's financial management businesses - Heritage Wealth Management Inc., Heritage Insurance Services Inc. and Icon Wealth Management - for possible securities violations.

"The charges are evolving as we speak. We wanted to move very quickly on this case," Indiana Secretary of State Todd Rokita told i>The Early Show. "We filed two charges regarding his failure to renew his securities license and then for improperly transacting amounts - acting as an investor representative in the state of Indiana in an improper fashion."

Authorities were investigating Schrenker's businesses on allegations that he sold clients annuities and charged them exorbitant fees they weren't aware they would face.

"Toward the end of our relationship, I began to discover that many, if not most, of the investments … were placed in vehicles that greatly benefited him through very exorbitant commissions," investor Mike Kinney told The Early Show.

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 of their original $900,000 investment.

"This is what we call affinity fraud," Rokita said. "It's one of the worst kinds of frauds, because it's perpetrated by people we think we can trust."

On Friday, two days before the crash, a federal judge in Maryland issued a $533,500 judgment against Heritage Wealth Management Inc., and in favor of OM Financial Life Insurance Co. The OM lawsuit contended Heritage Wealth Management should return more than $230,000 in commissions because of problems with insurance or annuity plans it sold.

That's not the only legal problem he'll have to face if he's found: Florida officials believe he'll face a host of charges related to the crash.

(A single-engine Piper Malibu Meridian flown by Marcus Schrenker is seen after having crashed in East Milton, Fla.)

"You just can't let an unmanned aircraft just maliciously fly into a residential area without facing any consequences," Santa Rosa County Sheriff's Office spokesman Scott Haines said Tuesday on The Early Show.

The events of the past few days appear to have been 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 2,000 feet 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 the aircraft 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 220 miles to the north, at a convenience store in Childersburg, Alabama, police picked up a man using Schrenker's Indiana driver's license 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 apparently 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.

The search was turned over to the U.S. Marshals. Some law enforcement officials said they believed Schrenker had fled the country.

At 38, Schrenker was at the 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.

And by outward appearances, he was doing quite well.

Death-Defying Stunt

He collected luxury automobiles, owned two airplanes and lived in a 10,000-square-foot house in an upscale neighborhood known as "Cocktail Cove," where affluent boaters often socialize with cocktails in hand. In May 2000, he wowed onlookers by flying a special airplane at 270 mph, 10 feet 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 officials now say Schrenker's enterprise was ready to topple.

Left: Schrenker's mansion

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 - including Kinney - to allow him to manage their retirement accounts. But some of the pilots stopped investing with him after a court case raised questions about his past.

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."

The retired pilots were unsuccessful in stopping Delta from terminating the pension plan, and the group accepted a small settlement from the airline.

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.

"They uncovered things that literally made your jaw open," said Smith, adding that he and other pilots stopped letting Schrenker manage money for them after the deposition. "I believe he was scared to death that Delta was going to expose him."

According to the 156-page deposition obtained by The Associated Press, a judge in a 2003 bankruptcy 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.

"It is obvious to the court that the debtor has access to a significant cash flow that he is using for his personal benefit that has not been disclosed in this bankruptcy filing and in his personal tax returns," one document reads.

Kinney said he and his parents had invested hundreds of thousands with Schrenker, but considered him more like a family friend than a financial consultant.

(After his empty plane crashed, Marcus Schrenker was recorded on the surveillance camera of the Harpersville Motel in Harpersville, Ala.)

Schrenker, his wife and three children vacationed twice at Kinney's parent's lake house on northern Georgia's Lake Lanier. But a few years ago, cracks began to surface in the relationship.

Kinney's brother discovered $60,000 was inexplicably missing from his 85-year-old father-in-law's investment with Schrenker. Schrenker told the family not to worry, that the money was still there in complex financial statements.

"It's still the most disgusting thing I've been a part of - to know that someone let you hold their new baby on one side and was basically stealing you from on the other," Kinney said.

In recent weeks, Schrenker's life began to spin out of control. According to documents in a lawsuit filed in Indianapolis, Schrenker sent a frantic e-mail to plaintiffs on Dec. 16.

"I walked out on my job about 30 minutes ago," it read. "My career is over ... over one letter in a trade error. One letter!! ... I've had so many people yelling at me today that I couldn't figure out what was up or down. I still can't figure it out."

It's unclear to what "error" he is referring. In another e-mail to a neighbor following his disappearance, Schrenker made reference to having "just made a 2 million dollar mistake." But it appeared he was hoping to work things out.

"I'd rather lose everything than screw a person out of a dime," he wrote to the plaintiffs in the Indianapolis case.

But things were now out of his hands.

On Dec. 31, officers searched Schrenker's home, seizing the Schrenkers' passports, $6,036 in cash, the title to a Lexus and deposit slips for bank accounts in Michelle Schrenker's name, as well as six computers and nine large plastic tubs filled with various financial and corporate documents.

In the supporting affidavit, investigators suggested Schrenker might have access to at least $665,000 in the offshore accounts of a client.

But it wasn't just his finances that were in turmoil.

Just a day before, Michelle Schrenker had filed for divorce. She told the people searching the house that her husband had been having an affair and had moved into a condominium a week earlier.

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, Indiana "And I don't know what all his problems are, but sometimes we just don't think straight, get our heads twisted on wrong."

Hours after Schrenker vanished, neighbor Tom Britt received what he believes is an e-mail from Schrenker.

Britt told CBS' The Early Show that he received the message at 7:38 p.m. Monday - approximately 24 hours after Schrenker had radioed the distress call from his airplane.

"By the time you get this, I'll be gone," the e-mail said. Britt turned the message over to authorities, fearing it was a suicide note.

The ominous message told his friend that the situation was a misunderstanding and warned: "I embarrassed my family for the last time."

"You started looking at his wife divorcing him, you start looking at all the other stories that kind of underlie this whole thing, you know, it could be the last act of a desperate man," Britt told The Early Show.

In the e-mail, Britt is asked to set the record straight and Schrenker says he's stunned after reading coverage of the case on the Internet. According to the e-mail, the accident was caused when the window on the pilot side imploded, spraying him with glass and reducing cabin pressure.

"Hypoxia can cause people to make terrible decisions and I simply put on my parachute and survival gear and bailed out," the e-mail reads.

[getoffmine1]

It seems like everyone with a company with the name wealth managment in the title is a crook. It is looking like the whole investment sector of the economy is one big ponzi scheme. It will get alot worse.

[runningralph]

It''s possible the this guy could start over with a new identity and become a taxpayer. Very unlikely but possible.

[labourboss]

I guess he figured if it worked for Ken Lay it would work for him!

[mnelsonix]

Ahhh...everyone is doing it...why me...gosh...i only cheated a little...why me?

[lemonskink]

No sympathy here for this guy. None for Bush either. You reap what you sow.

[noirviolette]

Mr.Schrenker,if by some small chance you may be reading this please know there is no embarrassment,no mistakes or money problems that can not be solved,but family and friends who love and care about you,those sad and empty hearts can''t be healed.For their sake as well as your own I hope you contact them or turn yourself in and not put those that care in saddness by an act of despair.I am a person who looks at all sides of things and I see another side to your story.

[otiswestfall]

Interesting that he bailed out of an airplane a few days after his wife bailed out of the marriage. Maybe she believed she could get her half before the Feds got it all.

[docpeter1953]

Mr.Schrenker,if by some small chance you may be reading this please know there is no embarrassment,no mistakes or money problems that can not be solved,but family and friends who love and care about you,those sad and empty hearts can''''t be healed.For their sake as well as your own I hope you contact them or turn yourself in and not put those that care in saddness by an act of despair.I am a person who looks at all sides of things and I see another side to your story.

Posted by noirviolette at 12:25 PM : Jan 13, 2009
__________________________

Geeze, ms_premise would have a field day with this one.

[docpeter1953]

Interesting that he bailed out of an airplane a few days after his wife bailed out of the marriage. Maybe she believed she could get her half before the Feds got it all.

Posted by OtisWestfall at 12:52 PM : Jan 13, 2009
_________________

That would be Affirmative. Funny what the words ''till death do us part'' mean to some.

[evian_ycnan]

I got news for ya...jumping out of an airplane is not "fake" anything!

Posted by DaVicar3 at 12:45 PM : Jan 13, 2009

http://tinyurl.com/4tsg5d

[kadee123]

I am tired of reading about grown money hungry men using other people and then expecting sympathy and/or justification.

[getoffmine1]

Mr.Schrenker,if by some small chance you may be reading this please know there is no embarrassment,no mistakes or money problems that can not be solved,but family and friends who love and care about you,those sad and empty hearts can''''t be healed.For their sake as well as your own I hope you contact them or turn yourself in and not put those that care in saddness by an act of despair.I am a person who looks at all sides of things and I see another side to your story.

Posted by noirviolette at 12:25 PM : Jan 13, 2009

but in the case you did anything dishonest to cheat your investors better you do the honorable thing and check out for good.

[nobdysfool]

Just goes to show greed & $$ get you nowhere.

[creeper00]

Are we supposed to feel sorry for this swindler?

[aldee41]

This is the sort of "bailout" we need to see more of but leave the parachute at home.

[stinginrich]

Just goes to show greed & $$ get you nowhere.


--------------------------------------------------------------------------------

Posted by nobdysfool at 01:30 PM : Jan 13, 2009
+ report abuse

Tell that to any of the Shrub Family members, or Darth on his way to Dubai where vaults stacked floor to ceiling with cash await his return.....

[nobdysfool]

Just goes to show greed & $$ get you nowhere

Posted by nobdysfool at 01:30 PM : Jan 13, 2009
+ report abuse

Tell that to any of the Shrub Family members, or Darth on his way to Dubai where vaults stacked floor to ceiling with cash await his return.....

Posted by stinginrich at 03:19 PM : Jan 13, 2009

Well of course from their standpoint they are "ahead" of everyone with their wealth, but on a spiritual level they are void of true wealth.

[comeon11]

let''s not jump to conclusion. the article does not say anywhere that he swindled anything.

[comeon11]

I have a feeling that some of you could care less whether this man did wrong or not- you instantly hate him because he is rich. envy is a sin, you know. one of the worst vices of mankind.

[clathrate]

This guy should be charged with attmepted murder. He knew full well that his plane could strike another aircraft or a class full of kids for that matter. It is only a miracle people didn''t die.

This guy desperately needs the Khmer Rouge version of waterboarding.

[clathrate]

let''''s not jump to conclusion. the article does not say anywhere that he swindled anything.


--------------------------------------------------------------------------------

Posted by comeon11

No, I''m sure the FBI, the maryland State Police, and the Indiana State Police are investigating him for singing too loud at choir practice. It''s not like he was indicted for fraud and selling securities without a license. And, on top of that, he damned nearly killed innocent people in his premeditated escape plan.

Man are you dumb.

[comeon11]

william412....................in order to hate someone with no true reason (i don''t see anywhere in the article where he is found to have done most of what people here are accusing him off such as swindling), it has to be envy because he is rich. Let''s not lie to ourselves.

[comeon11]

clathrate.....................his company owes another corporate company some money from a court ruling. that''s all he was investigated for. did you read the article or did you jump to conclusion, like i thought?

[clathrate]

"troubles worsened Tuesday, when a judge in Indiana ordered Schrenker arrested on financial fraud charges after prosecutors said he had given financial advice to clients and made business deals even though his state license had expired on Dec. 31"

Read the article moron.

[comeon11]

william412...............they lust what he has, and they envy him because they lust what he has. same reason. two vices.

[nobdysfool]

it has to be envy because he is rich. Let''''s not lie to ourselves.

Posted by comeon11 at 03:42 PM : Jan 13, 2009
+
comeon11, maybe YOU feel people should be "envious" of someone because of their wealth, but someday you may learn that $ is truly unimportant in the big scope of life...

[comeon11]

william412.................I am saying that YOU hate him, but from the past statements by many, the hate of the rich is easily seen. Old saying: admiration leads to envy, then envy leads to hate. we are at that point in society.

[clathrate]

Hate is tobasco sauce.


--------------------------------------------------------------------------------

Posted by william412

So you''re saying hate is good? Is that what you''re saying Donnie/William/whateveryournameis?

[comeon11]

william412.................I meant to say that "I am NOT saying that YOU hate him......."

[clathrate]

I am saying that YOU hate him, but from the past statements by many, the hate of the rich is easily seen. Old saying: admiration leads to envy, then envy leads to hate. we are at that point in society.


--------------------------------------------------------------------------------

Posted by comeon11

Well, I''m glad you cleared that up for us.

I''m sure your sense of others'' motivations is as crystal clear as Donnie''s typical posts.

Me, I just hate the guy because he damned nearly killed innocent people. I could care less if he ripped off some stooges who can''t invest their own money. But risk other''s lives to get away from da fuzz? Not cool.

[comeon11]

you admire with the hopes that you are able to attain the features of the admired. when it becomes clear that this might not be attainable, it typically leads to envy. its human nature. A person who constantly compliments you is not your friend.

[comeon11]

william412.................its quite possible. that is if you admire instead of lust.

[clathrate]

So when I watch pornos I wanna be a woman?


--------------------------------------------------------------------------------

Posted by william412

Warning: that WILL set your pants on fire. You got to get on the good foot.

[comeon11]

clathrate..................can you continue to conversation with williams. i gotta head out right now.

[comeon11]

william412................i gotta go. look up the difference in the dictionary. there is a difference. the sarcasm was fun.

[lovegetpeace]

This is a classic example of what the NeoCons always preach us Democrats that they Work Extremely Hard with a High IQ to live the American Dream without Government Welfare.

[clathrate]

william412................i gotta go. look up the difference in the dictionary. there is a difference. the sarcasm was fun.


--------------------------------------------------------------------------------

Posted by comeon11

Oh I hate it when someone gets me barking and then runs away. It''s only fun when the kids stick their hands through fence...here doggie, here doggie, hee hee hee, here doggie, NO! BAD DOGGIE BAD!

[b4ucmyi]

If he''s on a motorcycle in the south, he won''t get far. Some crazy driver will splatter him at an intersection.

[clathrate]

Some people put pineapples on their pizza.


--------------------------------------------------------------------------------

Posted by william412

It comes full circle when the tennager eats the pizza and his face becomes a pineapple.

[myrvia]

Come on guys and gals, have a heart. The guy had lost everything. I DO NOT condone what he did, putting innocent lives at risk, but everybody has a breaking point. He is lousy at covering his tracks. It''s almost as if he wanted to be caught. BTW, I had to laugh at harrycoxx coment about Hamas looking for pilots. Good one!

[clathrate]

Come on guys and gals, have a heart. The guy had lost everything. I DO NOT condone what he did, putting innocent lives at risk, but everybody has a breaking point. He is lousy at covering his tracks. It''''s almost as if he wanted to be caught. BTW, I had to laugh at harrycoxx coment about Hamas looking for pilots. Good one!



--------------------------------------------------------------------------------

Posted by Myrvia

Aww, give the guy a break. He only stole some money and then allowed his plane to become a flying wrecking ball! It''s not like plane crashes kill people on the ground!

On the bright side, his canoeing trip went swimmingly well. Motel 8, here we come!

[clathrate]

I think people ride motorcycles to overcome their flatulence problems.

No one can hear you over the V twin sound, epecially if you time it just right.

[lovegetpeace]

Can someone inform this fugitive to apply for a Bailout from the Government. All Bailed out Banks got Government money because they also made bad investments like this poor stupid guy.

[rogmed-2009]

This guy apparently learned nothing from Madoff. Don''t run. Don''t hide. Just bask in the media attention from the the thievery and deceit. And just keep on stealing. Oh, and have a few judges in your pocket.

[ladyephesus1]

Too bad Madoff wasnt this smart.

[missingamerica]

Well, I''ll be...somebody from the financial industry that managed his own bail-out, for a change.

Out of an airplane, and poorly at that, but all things considered this one is going to cost the American people a lot less than keep Paulson''s friends in Hennessy Ellipse cognac and Gurkha cigars has and will.

[girlmiami]

Thanks to Bush..I feel for the guy..

[scottyusa]

What an idiot this guy is. No wonder his wife left him. He could have killed someone on the ground. I wonder how many people are going to get financially screwed by this guy. Seems like all the weasels are coming out of the woodwork lately.

[gce65]

Maybe, like Keyser Soze, one minute he''s there and the next...pffft!....he''s gone.

I hope he gets away with it and lives it up on other people''s money.

But bailing out and letting the plane fly on autopilot until it crashes is irresponsible. Maybe his head should explode for that.

[nebul09]

all the greedy are homicidal, committing suicide, and terrorist- criminal. if this is the benefit from extreme capitalism, count me out...you can''t put a price tag on peace!