Kokomo Tribune; Kokomo, Indiana

Local News

October 3, 2013

State officials: Schwartz ran Ponzi scheme

Attorney general seeks to freeze assets

State officials filed an emergency petition to freeze some of deceased Kokomo “wealth manager” Richard Schwartz’ assets Wednesday, alleging Schwartz was running a multi-million-dollar Ponzi scheme.

Attorneys representing more than a dozen potentially competing interests are expected in Howard Superior Court IV Friday morning, in the first round of what is likely to be a protracted battle over any remaining assets Schwartz held.

Schwartz, well-known from his billboards around Kokomo, ran RAS Associates, 1932 S. Dixon Road, which billed itself as an investment firm.

He committed suicide on Aug. 21 at a Simpsonville, Ky., mansion.The million-dollar estate, purportedly Schwartz' home, was owned by a company called Field of Dreams LLC.

Valerie Kroeger, a spokeswoman for the Indiana Secretary of State’s office, said state officials are “confident” Schwartz was running a Ponzi scheme.

“When we started looking into this, we received a large number of complaints from investors, saying there was a failure to pay. That’s typical with this sort of thing,” Kroeger said. “They receive monthly interest payments, and all of the sudden it starts to fall off, because [the schemer] can’t keep new investments coming in.”

Kroeger said state officials have already identified between $5 million and $10 million in possible victims’ losses in the case. She said those losses are expected to mount in the coming weeks.

“At this point, we’re still looking for victims,” she said. “They are all over the country, in Kentucky, Arizona and Indiana. We’re hesitant to put a number on it, because we’re just not sure at this point.”

The Indiana Attorney General’s office filed a motion on behalf of the Indiana Securities Commissioner’s office Wednesday, seeking to intervene before the court makes any rulings on Schwartz’ estate.

According to the filing, attorneys are due in court Friday to ask Judge George Hopkins to dissolve a constructive trust set up over Schwartz’ life insurance.

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