Unlike Durham, Justice Swift For Hauke

It was just eight months ago that the Secretary of State's office moved to freeze the assets of Fishers hedge fund manager Keenan Hauke after a former employee blew the whistle on irregularities he found while sifting through the financial records for Hauke's business. The U.S. Attorney's Office has wasted no time in bringing formal criminal charges against Hauke, and Hauke has already agreed to plead guilty to defrauding 67 investors out of more than $7 million. According to the Indianapolis Star, the U.S. Attorney's Office plans to seek a prison sentence for Hauke of more than 17 years for Hauke. Asset recovery has moved along nicely as well.

It is not yet clear how much money investors may recover. However, state and federal investigators and a receiver appointed in Hamilton Superior Court has already seized about $1.8 million from bank accounts Hauke controlled and is going after more than 1,100 gold or silver coins, his home in Fishers and a condominium in tropical Barbados, plus personal items.

The investigation by state and federal agencies began nearly nine months on a whistleblower tip from an employee of Hauke’s Samex Capital headquartered in Fishers.

Contrast Hauke's treatment with that of indicted Ponzi scheme operator Tim Durham, who is still out on bail months away from facing a judge and jury, subject to home detention, more than two years after FBI agents first raided his offices years after a whistle blower had first began alerting federal and state authorities to the fact that Durham had been operating Fair Finance Company as a personal piggy bank. The U.S. Attorney's Office took nearly 18 months after raiding Durham's businesses before bringing formal charges against him. Ohio investors lost more than $200 million as a result of Durham's actions.

Federal authorities refused to freeze Durham's assets as Hauke's assets were immediately frozen. Actually, former acting U.S. Attorney Tim Morrison initially filed a complaint in federal district court to do just that but turned tail when Durham's politically-connected lawyer at Barnes & Thornburg, Larry Mackey, paid him a visit, after which he promptly withdrew the government's asset forfeiture complaint against Durham. As a consequence of Morrison's actions, defrauded investors were forced to hire private attorneys and petition to have his company placed in involuntary bankruptcy proceedings. A bankruptcy trustee appointed by a federal bankrupty court judge in Ohio has painstakingly tried to recover money for the defrauded investors with absolutely no help from federal law enforcement officials. To date, only about $3 million has been recovered, most of which has gone to pay professional fees for administering the bankruptcy estate.

It really does help when you have powerful political friends on your side like Durham has, who have more than a passing interest in making sure you don't do too much talking to the wrong people, and a wealthy, mysterious ex-father-in-law willing to help you out financially with your legal expenses who just happens to be a former high-ranking OSS officer. Yep, you can pretty much bet that the bulk of the money squandered by Durham from those disposable rural Amish folks in Ohio will never find its way back into their hands to be passed on to their heirs. We can only speculate who's holding their money and for whom if any of it still exists in the form of a recoverable asset. Suffice it to say that it's not being used for good purposes.

UPDATE: Speaking of missing money, is it not incredulous that former New Jersey Senator and Governor Jon Corzine has no idea what happened to $1.2 billion of MF Global investors' money? A lot of people don't realize this, but Corzine is an Illinois native who grew up on a farm near Taylorville, Illinois. Like Durham's victims at Fair Finance, many of MF Global's investors included farmers from the heartland. As the Wall Street Journal reported:

The havoc wreaked by MF Global's bankruptcy filing has been felt not just by Wall Street investors and traders, but also by wheat and corn growers, cattle ranchers and pig farmers. Dotting the farm belt, many who used the commodities market to protect against price swings are finding their money locked up and their hedges unwound due to the firm's downfall . . .

Capitol Hill has been flooded by calls and letters from farmers, farm-industry groups and others demanding help, as well as answers on why MF Global's demise upended a system that had quickly resolved most earlier brokerage failures. Legislators are pushing regulators and the firm's leaders to fix the problem and explain who is responsible . . .

We're getting more calls on [MF Global] than anything else," said Sen. Pat Roberts (R., Kan.), ranking minority member of the Senate Agriculture Committee, in an interview following a committee meeting last week. "It's now been one month since MF Global declared bankruptcy, but we still have folks with their ranches on fire."

Customers are still awaiting a transfer of another $2.1 billion out of a total $5.5 billion in funds owned by former customers of MF Global, which remains frozen in the wake of its Oct. 31 bankruptcy filing. The trustee charged with winding down the firm continues to search for what he estimates to be roughly $1.2 billion in unaccounted-for customer money, though some believe the figure to be significantly less.

"We didn't think this was a risk that we even had to think about," says Mark Greenwood, vice president at AgStar Financial Services, a Minnesota farm lender that estimates its clients have as much as $40 million locked up at MF Global.

As one of the largest U.S. commodities brokers, MF Global served hundreds and perhaps thousands of farmers who use the commodities markets, often alongside insurance, to protect themselves against price swings in their crops in a process called hedging.

With hedging, the farmers buy futures contracts to lock in a price, helping to ease the burden of market fluctuations. Being hedged also makes it easier for farmers to get loans from banks, industry participants say.

Corzine, a Democrat, was one of Obama's largest campaign fundraisers on Wall Street. There have been rumors for some time among the ag community that Secretary of State Hillary Clinton on behalf of the Obama administration brokered a Faustian bargain with the Chinese during the wake of the current economic crisis concerning the large American debt held by the Chinese. According to the rumor, Clinton signed papers pledging significant amounts of rich farmland from the Midwest for Chinese cooperation. Don't be surprised if you start learning in the near future that the Chinese become new owners of a significant amount of America's richest farmland.

Neither Obama nor the Clintons can be trusted. Don't forget that the Clintons were caught red-handed raising tons of illegal campaign contributions from the Chinese and other Asians during Bill Clinton's re-election campaign. Both Clintons should have gone to prison for their crimes but they were instead rewarded. So why should we be surprised to learn that one of the firm's former top officials works at the State Department for Hillary Clinton, and Bill Clinton's consulting firm was on MF Global's payroll while American farmers' money was being stolen by these thieves? Barack Obama raised tens of millions of dollars illegally from foreigners during his 2008 presidential campaign and nothing was done about it because it was preordained that The One had to become president. Don't forget that Obama took time out during one of his visits to Indiana to record a quick line expressing his support for Tim Durham, II's campaign for class president at Indianapolis' prestigious Park Tudor High School. Has anyone ever wondered how Obama knew the Durhams? The YouTube video has since been removed from the Internet. Corzine, the Clintons and the Obamas are among the biggest criminals in America. They will sell out America in a heartbeat to line their own pockets. Until they are all behind bars, the Republic millions of patriots have fought and died for throughout our history is not safe.

Check out the questioning of Corzine by Sen. John Thune while testifying before the Senate Agriculture Committee. Check out particularly the questioning concerning foreign sovereignty investments.

Assets Of Small-Time Fishers Money Manager Frozen Unlike Ponzi Scheme Operator Tim Durham

I guess it matters whose investments are at risk. When Indianapolis businessman Tim Durham stood accused of defrauding small-time investors in Ohio, many of whom were Amish, out of more than $200 million, the U.S. Attorney's Office in Indianapolis told us there was no need to freeze his assets because his attorneys had given them assurances he would not play any games with his assets. Even after he was indicted more than a year after the FBI raided his offices, his assets remain unfrozen. A federal magistrate had to send him to a half-way house for a week to force him to provide a more transparent financial disclosure statement to the federal court so he could be released to family members for home detention while he awaits his trial next year. When a former employee of a small-time investment adviser in Fishers, Scott Noble, recently blew the whistle on Keenan Hauke of Samex Capital Advisors for allegedly misappropriating clients' funds, the Indiana Secretary of State's Office wasted no time in obtaining a court order to freeze his assets before any charges have been brought against him. According to an IBJ report:

A Hamilton County judge has ordered a temporary asset freeze against prominent Fishers money manager Keenan Hauke, who is being investigated by the Indiana Secretary of State’s Office over financial irregularities involving a hedge fund he operates.


Superior Court Judge J. Richard Campbell on Friday also placed a temporary restraining order against Hauke, CEO of Samex Capital Advisors LLC, from doing business at least until a preliminary court hearing on April 25.

The Indiana securities commissioner's office sought the freeze because it said "good and reasonable cause exists to believe [Hauke and his businesses] violated the Indiana Uniform Securities Act."

A complaint filed by the state against Hauke, Samex Capital Partners LLC and Samex Capital Advisors LLC said Hauke "misled investors by failing to inform them that the funds they were investing would be converted to his personal use."

"Hauke employed a device, scheme or artifice to defraud investors of Samex Partners ..." the complaint says. "Specifically, he sold investments, in the form of hedge fund interests, to investors under the guise that the hedge fund invested in liquid publicly traded securities."

In addition, the complaint says Hauke "intentionally received funds from the bank accounts of Samex Partners that were illegally converted from investors."

While Hauke is not a big-time money manager, he has been very visible. He has contributed a regular column to the Indianapolis Business Journal and has been a frequent guest on Fox Business News and CNBC. According to the IBJ's website, he served on Mayor Greg Ballard's transition team. It is noteworthy that the whistle blower has opened up a business in competition with Hauke, who through his attorney claims has been pilfering clients from Hauke since his departure. "Hauke’s lawyer, Larry Mackey of Barnes & Thornburg, said in an e-mail that the complaint was filed by a 'former and disgruntled' employee who had previously never raised any concerns with Hauke," the IBJ reported. "Mackey said Noble subsequently sent an e-mail to all of Hauke’s clients soliciting their business for his new financial advising firm." "Noble denied he is trying to drum up business for his new firm, Ternion." "I did not do this to pilfer clients," he said. "I did this because there were documents that showed really bad things."