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Prosecution Assistance Unit

PAU in the News

2006

On November 3, 2006, Allen O. Snyder was sentenced in Marion Superior Court to three years after pleading guilty to theft. The Marion County Prosecutor Carl Brizzi filed the charges on a joint referral from the Prosecution Assistance Unit and Detective Doug Scott of the Indianapolis Police Department, organized crime unit. The agencies conducted a joint investigation over the course of several months after receiving complaints that Snyder, owner of HiTech Co. Accounting Services, had sold fraudulent investments in government bonds.

On November 2, 2006, Richard J. Drakulich was sentenced to 4 years for conspiracy to commit fraud during the offer and sale of a security and 5 years for conspiring to sell unregistered securities. The judge suspended five of the years, ordered Drakulich to pay restitution to his victims, and barred him from any future participation in the investment industry. Drakulich will be on probation for five years once he is released from federal prison.

On October 30, 2006, Charles Arthur Davis, Jr. plead guilty in Elkhart Superior Court 3 to one count offering or selling an unregistered security and one count of transacting business as an unregistered broker-dealer or agent, both counts are class C felonies. The Elkhart County Prosecutor, Curtis T. Hill, Jr. charged Davis after a referral by the Prosecution Assistance Unit of the Indiana Secretary of State, Securities Division.

Davis, who will be sentenced on May 10, 2007, sold promissory notes to finance his company FelSearch, Inc. Felsearch was originally going to be used to develop a national database for convicted felons.

On October 19, 2006, Richard J. Drakulich was found guilty by a jury in the Marion County Superior Court of six counts of conspiracy to commit fraudulent or deceitful acts during the offer or sale of a security and five counts of conspiracy to offer and sell unregistered securities, all eleven counts being class C felonies. The Marion County Prosecutor's Office originally charged Drakulich after a referral by the Prosecution Assistance Unit of the Indiana Secretary of State, Securities Division.

During the four-day jury trial, PAU counsel assisted Marion County Deputy Prosecutor, Rom Byron, and the PAU also provided expert testimony. Drakulich was charged with conspiring with David Proctor and Casimir Szpunar to sell fraudulent promissory notes for Realfinder Inc. As part of their plea agreements, both Proctor and Szpunar testified against Drakulich.

Drakulich is scheduled to be sentenced in December 2006.

On September 7, 2006, Frankfort resident Phillip Butler was arrested by the Clinton County Sheriffs Department on a warrant issued out of Hamilton County charging Butler with two counts of fraudulent or deceitful acts while acting as a loan broker, and one count of theft; all three counts are Class D felonies. The charges were filed by Hamilton County Prosecuting Attorney Sonya Leerkamp upon a referral from the Prosecution Assistance Unit.

Butler is currently free on bond awaiting trial in Hamilton County for three securities charges, including fraud in the sale of a security after being arrested in 2005. The 2005 arrest was the result of a sting initiated by the Prosecution Assistance Unit and carried out with the assistance of the Indiana State Police and the Hamilton County Sheriff's Department for illegally offering and selling an unregistered security to an undercover Indiana State Police Detective and a Secretary of State's Office Securities Investigator.

Butler is also currently on probation in Clinton County after pleading guilty in July 2005 to four counts of securities. He was barred from the securities industry in 1989 and plead guilty in 1990 to forgery and two counts of theft in Hamilton County. There, he was sentenced to five years of prison to be served concurrently to a 1991 Clinton County four-year prison sentence for pleading guilty to four counts of selling unregistered securities.

On August 23, 2006, Larry D. and Julie Ann Goble of Warsaw were sentenced for fraudulent securities sales that cost Kosciusko County investors about $250,000 dollars. Robert Goble pled guilty to fraud in the offer or sale of a security and received a six year sentence with one year executed and five years on probation. His wife, Julie Goble, pled guilty to fraud in the offer or sale of a security and was given a four year suspended sentence.

The Gobles obtained an estimated $848,000 from 27 investors statewide while soliciting investment contracts for Egar Bias and his company, FIIK.

The case was prosecuted by Kosciusko County Prosecutor R. Steven Hearn on a referral from the Prosecution Assistance Unit of the Indiana Secretary of State's, Securities Division.

On July 19, 2006, a Federal Grand Jury sitting in South Bend, Indiana returned a 20-count indictment charging Thomas and Marietta Squibb with mail fraud, wire fraud, and conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. §§ 371, 1341, and 1343. These charges were filed as a result of an investigation by the Prosecution Assistance Unit working in conjunction with the Federal Bureau of Investigation.

The indictment charges that, since at least 1995, the Squibbs raised over $3 million dollars through the issuance of promissory notes to more than 84 investors under the pretext of developing campgrounds in four Michigan cities and condominiums in Naples, Florida. In fact, the Squibbs did not use investors' funds for the stated purposes.

Neither the Squibbs nor the promissory notes were registered with the Indiana Secretary of State, Securities Division as required by law. In February the Securities Division issued an order directing the Squibbs to cease and desist from violation the Securities Act and in April Rokita's office filed a civil suit in St. Joseph County Circuit Court to freeze the Squibb's assets for the benefit of the investors. That action remains pending.

On June 27, 2006, Arlen McBride pled guilty in the Marion County Superior Court to one count of fraudulent or deceitful acts during the offer or sale of a security and McBride was sentenced to eight years, all suspended, with four years of supervised probation and ordered to pay $30,000 in restitution. McBride was originally charged with 2 counts of offering and/or selling unregistered securities, 2 counts of acting as an unregistered broker-dealer or agent, and 2 counts of fraudulent or deceitful acts in the sale of a security, by Marion County prosecutor Carl Brizzi upon a referral by the Prosecution Assistance Unit.

McBride sold a promissory note issued by BHT Investments and allegedly sent the money to Bobby E. Hearn, of Ft. Worth, Texas, who was indicted on April 28, 2005 in the Tarrant County Texas, Criminal District Court, No. 3, for selling securities at a time when he was not registered with the Texas Securities Commissioner and for selling unregistered securities.

On June 19, 2006, Jerry K. Scott, of Lapel was arrested and charged with ten (10) counts of offering and/or selling unregistered securities, ten (10) counts of selling securities as an unregistered agent, and ten (10) counts of fraudulent or deceitful acts in connection with the offer and/or sale of a security. Each of the thirty (30) counts is a Class C felony punishable by up to Eight (8) years imprisonment and a $10,000 fine.

Madison County Prosecutor Rodney J. Cummings filed the charges on a joint referral from the Prosecution Assistance Unit, the Indiana State Police, and the Fishers Police Department. The agencies conducted a joint investigation over the course of several months. Scott is accused of using his company Retirement Planners of America, Inc. to sell promissory notes to at least nine (9) Indiana residents for approximately $512,945.00 while failing to give his clients accurate information about the nature and worth of their investments. Scott was arrested by the Lapel Town Marshal, Dennis Molina.

On April 24, 2006, Michael Boehm was sentenced by the St. Joseph Superior Court to eight (8) years imprisonment upon his guilty plea to four (4) counts of selling unregistered securities to residents of South Bend. In exchange for the guilty plea, twenty-six (26) remaining counts of securities fraud and transacting business as an unregistered broker-dealer or agent were dismissed.

The case was presented by St. Joseph County Prosecutor, Michael A. Dvorak, on a referral from the Prosecution Assistance Unit. Boehm caused his company, M & D Whirlwind to issue approximately $4.5 million in promissory notes with interest rates of up to thirty percent (30%) to 65 Indiana residents. Boehm used part of the proceeds to make high risk loans to persons who were not credit worthy and who ultimately defaulted on their loans to Boehm's company.

On March 14, 2006 Allen O. Snyder was charged with four (4) counts of Theft and one (1) count of Corrupt Business Influence. Three (3) of the theft charges are Class D felonies punishable by up to Three (3) years imprisonment and a $10,000 fine. One (1) of the theft counts as well as the corrupt business influence count is a class C felony punishable by imprisonment of up to 8 years and a fine of $10,000.

The charges were filed by Marion County Prosecutor Carl Brizzi on a joint referral from the Prosecution Assistance Unit and the Indianapolis Police Department, Organized Crime Unit. The agencies conducted a joint investigation over the course of several months. Allen is accused of bilking at least four (4) Indiana residents out of approximately $300,000 upon representations that he was investing their money in real estate, government securities and/or GNMA bonds.

On January 9, 2006, Vanderburgh County Prosecutor Stanley Levco filed 22 securities charges against Robert D. Mildenhall a\k\a Robert Meldenhall based on a referral from the Prosecution Assistance Unit. Mr. Mildenhall is charged with fradulently selling stock in PhyMed Partners, Inc to two senior citizens, one 89 and the other 63 years old, in Vanderburgh County. Bail was set at two million dollars.

Mr. Mildenhall has been arrested and is currently incarcerated in Tennessee where he has also been charged with securities violations as well as solicitation to commit murder in which the intended victims were two attorneys with the Securities Division of the Tennessee Department of Commerce and Insurance.

James Lamar McMichael, the owner of PhyMed Partners, Inc. has pled guilty to securities fraud in Florida and is currently scheduled to be sentenced on March 31, 2006.

Mr. Mildenhall was an insurance agent in Illinois recommended to the Indiana victims through a friend. He was not registered in Indiana to sell either insurance or securities. A toll free call to the Secretary of State, Securities Division (1-800-223-8791) would have disclosed that Mildenhall was not registered to sell securities in Indiana.

2005

October 25, 2005
Criminal Charges Filed Against Marion Securities Offenders

August 5, 2005
Secretary of State's Prosecutors Assistance Unit Nets Offenders

April 22, 2005
Criminal Charges Filed Against Internet Scam Artist

March 30, 2005
Hamilton County Sting Nets Securities Offender

2004

December 16, 2004
Secretary of State Todd Rokita today commented on the sentencing

December 7, 2004
Rokita Releases Securities Prosecution Manual

December 2, 2004
Secretary of State Todd Rokita today praises the arrest of and filing of additional criminal charges against Phillip Butler by Clinton County Prosecuting Attorney Louis Evans

December 1, 2004
Secretary of State Todd Rokita today announced that an arrest warrant was successfully served on Daniel J. Swift

November 30, 2004
Secretary of State Todd Rokita today praises the filing of criminal charges in a securities fraud case initiated by his office

November 22, 2004
Secretary of State Todd Rokita today praised the teamwork that led to the filing of criminal charges against Arlen McBride

November 19, 2004
Investment Scam Suspect Indicted

September 2, 2004
Investigation Leads to Charges in Washington County

June 24, 2004
Investigation Leads to Securities Conviction in Vanderburgh, Dubois, Daviess Counties

June 4, 2004
Securities Investigation Leads to Fraud Conviction in Marion County

March 5, 2004
Rokita Applauds Passage of Securities Legislation

February 27, 2004
Secretary of State's Investigation Uncovers Mortgage Fraud in Cass County

January 12, 2004
Secretary of State's Investigation Uncovers Alleged Fraud in Southern Indiana

2003

August 15, 2003
Government Cooperation Leads to Guilty Plea

June 19, 2003
Secretary of State Todd Rokita Holds Roundtable with County Prosecutors

June 18, 2003
Secretary of State's Investigation Leads to Fraud Conviction in Bartholomew County

April 17, 2003
Secretary of State Rokita's Office Uncovers Investment Fraud in Howard County

March 27, 2003
Rokita's Office Investigates and Uncovers Alleged Central Indiana Investment Fraud