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Hauke receiver files suit against his former accounting firm

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The receiver representing investors in the Ponzi scheme run by convicted money manager Keenan Hauke has sued Hauke's former accounting firm, charging that its negligence contributed to millions of dollars in investor losses.

Carmel attorney William Wendling Jr. filed suit in Marion Superior Court on Monday against Indianapolis-based DeWitt & Shrader PC and executives David DeWitt and Matthew Hickey.

The lawsuit claims the 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.

DeWitt & Shrader had served as the accounting firm for Hauke’s Fishers-based hedge fund, Samex Capital Partners LLC, from January 2006 until April 2011.

Wendling charges in the complaint that DeWitt & Shrader failed to monitor Samex’s bank accounts, enabling Hauke to pilfer investor funds for his personal use.

“As Samex’s accountants, defendants either knew or should have known that Hauke was not following generally accepted accounting practices and compliance procedures, and either knew or should have known that Hauke was stealing from Samex and was operating a Ponzi scheme,” Wendling said in the suit.

David DeWitt, the firm's top executive, did not immediately return a call seeking comment.

Hauke pleaded guilty to fraud in December and was sentenced to 10 years in prison in March. He also was ordered to make restitution of $7.1 million, the amount the court determined he swindled from 67 investors.

In the suit, though, Wendling estimates the losses at $10 million. He is seeking to recover all investor losses attributed to DeWitt & Shrader’s negligence, according to the suit.

The complaint against DeWitt & Shrader follows a separate suit Wendling filed in April on behalf of investors.

He sued Larcher Investments LP and one of its managers, David Larcher, in federal court in Indianapolis. Larcher is executive vice president of Vestar Development, a Phoenix-based real estate developer.

The lawsuit claims Larcher deposited about $2 million into Samex through a series of payments and reinvested profits in 2002, 2004 and 2005.

Then, in 2008, Hauke wired Larcher nearly $2.6 million, describing the extra money as a gain on Larcher’s investments. Wendling claims the money Larcher received actually came out of the pockets of other investors.

The case is pending in federal court.

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. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  2. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  3. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

  4. It is wonderful that Indiana DOC is making some truly admirable and positive changes. People with serious mental illness, intellectual disability or developmental disability will benefit from these changes. It will be much better if people can get some help and resources that promote their health and growth than if they suffer alone. If people experience positive growth or healing of their health issues, they may be less likely to do the things that caused them to come to prison in the first place. This will be of benefit for everyone. I am also so happy that Indiana DOC added correctional personnel and mental health staffing. These are tough issues to work with. There should be adequate staffing in prisons so correctional officers and other staff are able to do the kind of work they really want to do-helping people grow and change-rather than just trying to manage chaos. Correctional officers and other staff deserve this. It would be great to see increased mental health services and services for people with intellectual or developmental disabilities in the community so that fewer people will have to receive help and support in prisons. Community services would like be less expensive, inherently less demeaning and just a whole lot better for everyone.

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