HAMMOND- George McKown, age 71, of Carmel, Indiana was sentenced before United States District Court Judge Philip P. Simon on his conviction for Wire Fraud and Conspiracy to Commit Securities Fraud, announced United States Attorney Clifford D. Johnson.
McKown was sentenced to 84 months in prison and ordered to pay over $5,212,159.45 dollars in restitution to the victims of his securities fraud and wire fraud schemes.
According to documents filed in this case, between 2008 and 2013, McKown partnered with Richard Gearhart to operate Asset Preservation Specialists (APS) a company they claimed would make profitable market investments for its clients. McKown and Gearhart recruited over 40 individuals to invest their savings, pensions, death benefits, and IRAs with APS, ultimately collecting millions of dollars. McKown, representing himself as the President of APS, promised his investors there was no risk to their initial deposit, they would receive a return of 6% to 8% on their investments and, upon request, their initial investment would be returned within thirty days.
After receiving the investors’ money, McKown and Gearhart abandoned the plan to invest money in the market and began using their clients’ investments to fund their own personal business projects and projects of their associates. By 2013, McKown and Gearhart had squandered over $5,000,000 of their investors’ money.
The individuals, through APS, kept its investors in the dark about the losses by sending fraudulent financial statements and 1099s to investors which falsely showed they were making a consistent profit on their investments. Through APS, the pair further continued to recruit new investors to hide the losses and keep the scheme afloat. Many of the victims first learned that APS had lost their savings when Gearhart filed for bankruptcy in 2013.
Co-defendant, Richard Gearhart pled guilty to conspiracy to commit securities fraud in December of 2019. He was sentenced to five years imprisonment and ordered to pay over $5 million in restitution in July of 2021. McKown was convicted of his fraud offenses following a jury trial in October 2021.
The case was investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Indiana Secretary of State Securities Division. This case was prosecuted by Assistant United States Attorney Thomas McGrath and former Assistant United States Attorney Toi Denise Houston.