Hauke accounting firm to pay $1.8M in fraud settlement

Jeff Newman
July 23, 2014
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DeWitt & Shrader PC, an Indianapolis-based accounting firm that worked for convicted Ponzi schemer Keenan Hauke, has agreed to pay $1.8 million to settle a state lawsuit, Indiana Secretary of State Connie Lawson announced Tuesday.

Hauke, a prominent money manager from Fishers who led hedge fund Samex Capital Partners LLC, was sentenced to 10 years in prison in December 2011 for securities fraud.

DeWitt & Shrader served as the accounting firm for Samex from January 2006 until April 2011.

The lawsuit claims the accounting firm violated the Indiana Securities Act and committed negligence and fraud, as well as breach of contract, by failing to monitor Hauke’s bank accounts.

“While Hauke was the perpetrator of this scheme, DeWitt & Shrader gave his scam credibility,” Lawson said in a prepared statement. “As the fund’s accountants, they had a responsibility to the investors to check Hauke’s work before issuing client account and tax statements.”

David M. DeWitt, principal of DeWitt & Shrader, did not immediately respond to messages seeking comment.

When the suit was filed against his firm in 2012, DeWitt told IBJ he thought the complaint was without merit and he planned to fight it. He eventually agreed to settle.

“Accountants or other licensed professionals who also hold securities licenses cannot afford to turn a blind eye if they see or suspect securities fraud,” Indiana Securities Commissioner Carol Mihalik said in a prepared statement. “They have an obligation to take action and in this case, they did nothing.”

Hauke admitted to masking huge losses in the hedge fund he operated that resulted in dozens of investors losing millions of dollars. He was 41 when he was sentenced to prison and ordered to pay $7.1 million in restitution.

A state-appointed receiver, William E. Wendling Jr., has since estimated the losses at more than $9 million and the number of victims at close to 100.

“The funds secured from this settlement will go toward repaying Hauke’s victims,” Lawson said. “Helping Hoosier victims is always our No. 1 priority and we will continue to work to maximize their restitution.”

Lawson said the state has returned more than $1 million to 97 investors so far. The funds were recovered through asset freezes, liquidation of Hauke’s accounts, and clawback litigation against Samex investors who made false profits from Hauke’s scheme.

The receiver also plans to sell a condo in Barbados worth about $360,000 that Hauke purchased with investor money.

Lawson said four Hauke victims also received $42,000 from the state’s Securities Restitution Fund.

Before his guilty plea, Hauke was a high-profile wealth manager who made regular appearances on CNBC, Fox Business Network, Bloomberg Television and Bloomberg Radio. He also wrote an investing column for IBJ.


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  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

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  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.