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[SOS] HOGSETT ANNOUNCES CHARGES AGAINST INVESTOR WHO DEFRAUDED LOCAL ELDERLY VICTIMS OF LIFE SAVINGS
Start Date: 4/17/2014 All Day
End Date: 4/17/2014
Entry Description

Indianapolis man allegedly bilked 30 victims of $1.4 million by using a bogus investment fund

 

PRESS RELEASE

 

Indianapolis – Joseph H. Hogsett, the United States Attorney, announced today that an Indianapolis man has been charged with devising a scheme to fraudulently obtain money from investors in order to enrich himself. Kevin James, 57, was charged by criminal complaint with securities fraud, mail fraud and two counts of money laundering while acting as an investment advisor promising higher returns on the victim’s investments.

 

“Stealing the hard-earned money that Hoosiers plan to retire on is inexcusable,” said Hogsett. “This office has repeatedly shown that anyone who chooses to violate the public’s trust by stealing investment funds will be held fully accountable. That commitment will never change.”    

 

According to the complaint, James has been an insurance agent and financial advisor for over 30 years and since 2008 has worked from his Indianapolis home. James reached out to a number of long-time clients, who relied on his professional advice, to offer additional investment opportunities beyond the annuities the client held, offering higher rates of return through a fund called Financial Security Program (FSP).  With other clients, James promised to reinvest their existing annuity in a new one at a higher rate of return.

 

James would then allegedly have his clients sign paperwork that would cash out all or a portion of their existing annuities. When the client received the check, they would endorse it to James or write a check from their own account which was allegedly deposited into James’ personal account. Many of the checks had “FSP Investment” written directly on the memo line. The government alleges FSP does not exist.

 

In a second scheme, James allegedly contacted a family who had life insurance proceeds due to them. James told them a loan had been taken out on the policy and before the final payment could be paid, the family owed James $10,900.00. They wrote him two checks totally that amount.  The loan had actually already been paid and that amount was deducted prior the insurance payout.  

 

On February 26, 2014, a federal search warrant was served on James’ residence.  It was recently learned that even after the search warrant was served, he allegedly continued to solicit $7500.00 in funds from investors for the FSP program.

 

The charges allege that James used his investor’s monies for personal expenses including $186,000.00 in cash withdrawals, Indianapolis Colts tickets, a country club membership, mortgage and credit card payments and private school tuition payments.

 

This case is the result of a collaborative investigation by the Internal Revenue Service, United States Postal Inspection Service, and the Indiana Secretary of State’s Office.

 

"IRS Criminal Investigation is united with the United States Attorney's Office and the rest of the law enforcement community in our resolve to financially disrupt individuals and organizations that commit crimes against our society.  We will continue to assist in investigating schemes to protect the American investing public."

 

“Kevin James could have been stopped in his tracks,” said Indiana Secretary of State Connie Lawson. “James failed to register himself or his product with my office, a requirement for financial professionals. If only one investor would have called my office or checked our online database, his scheme would have crumbled. I hope this serves as a reminder to always make sure the investment product and the provider are properly registered.”

 

Sharon M. Jackson, who is prosecuting the case for the government said, James could face up to 55 years in prison and a fine of up to $250,000 if convicted. James remains in the custody of the United States Marshal Service. No future court date has been set.

 

A complaint is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which time the government must prove guilt beyond a reasonable doubt.

Contact Information:
Name: Valerie Kroeger
Phone: 317-233-8655
Email: vkroeger@sos.in.gov
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