An Indiana businessman has admitted to cheating investors in Iowa and Colorado out of approximately $2.3 million through two separate investment schemes.
Lowell G. Hancher (a.k.a. Bob Hancher), of Sheridan, Ind., is the founder of Commerce Street Venture Firm, Inc., a private equity firm that purportedly invested funds in small companies that were in the process of going public.
According to his Oct. 26 plea agreement, Lowell Hancher used Commerce Street Venture Firm to defraud investors in a Colorado-based asphalt and general contracting company out of $1.8 million over a five-year period. Though he told investors their funds would be used to invest in Scott Contracting, Inc., he actually used the money to operate his own businesses.
When investors raised concerns about their accounts, he falsely promised that he would return their money.
At the same time, Hancher used his position as a director and audit committee member of Cycle Country Accessories Corporation, an Iowa manufacturer, to steal more than $500,000 from the company. To obtain the funds, he told Cycle Country that he would take the company private through a stock buyback. However, instead of doing as he had promised, Hancher used only a small portion of the funds to purchase Cycle Country stock and used the remainder for his personal purposes. He then created falsified documents to cover up the scheme.
The SEC filed civil charges against "Bob" Hancher in Jan. 2011. Though he admitted no wrongdoing at the time, he did agree to settle the complaint for $3 million. Criminal charges were filed later.
Hancher now faces up to 45 years in prison for one count of wire fraud and one count of securities fraud. A sentencing date has not yet been scheduled.