A central Indiana hedge fund manager has pleaded guilty to securities fraud. Forty-year old Keenan Hauke is the owner and CEO of Samex Capital and ran a hedge fund since 1999.
U.S. Attorney Joe Hosgett says Hauke defrauded 67 people of over $7 million from 2004 to this year. Hogsett alleges Hauke failed to invest the money as promised and falsely reported to investors. New investor money was allegedly used to pay those who did chose to close their account. The U.S. Attorney‘s office also allege that Hauke misappropriated and converted investor funds to his own benefit.
Assistant U.S. Attorney Steve Debrota says they do not allege Hauke promised large rates of return.
“He was making false statements about where the money was, what the rate of return was that he was actually earning and so forth,” Debrota says. “He did this by creating false documents, we allege, that looked like legitimate statements that you would get from a hedge fund and the investors are reading those and relying on them, so this is not a case at all of investor negligence. It’s about criminal activity.”
Indiana Securities Commissioner Chris Naylor says they are liquidating Hauke‘s assets to help pay back investors.
“Hauke purchased a condominium in Barbados. That property will be sought to be liquidated,” he says. “In return, that could be in excess of $400,000.”
Naylor says Hauke also purchased gold coins, which will be confiscated.
A former employee came forward in April and told investors of the scheme and Hauke‘s personal accounts were frozen. The Indiana Securities Division team is working to liquidate Hauke‘s assets in an attempt to repay investors. Hauke faces a maximum sentence of 25 years.