A long-time Seattle financial advisor was indicted by a federal grand jury with 23 criminal counts, including wire fraud, money laundering and investment advisor fraud, announced U.S. Attorney Jenny A. Durkan. Mark F. Spangler, 57, of Seattle is accused of diverting investor money from accounts he managed to risky start-up ventures in which he or his investment firm had an ownership interest. Spangler allegedly diverted more than $46 million to two companies, one of which is now shut down after failing to generate any positive revenue. Those who invested in the funds managed by Spangler, as part of The Spangler Group Inc.(TSG), were not told that their money was being invested in risky start-up companies. Spangler and several of his companies went into receivership last year. Today, the Securities and Exchange Commission filed a civil suit against Spangler as well. Spangler is scheduled to appear in U.S. District Court in Seattle on May 18, 2012 at 2:30.
“The Department of Justice is making the prosecution of financial fraud a top
priority,” said U.S. Attorney Durkan. “These investors lost millions to a man
they trusted to safeguard their resources. We are working closely with the SEC
to ensure Mr. Spangler is held accountable for his fraud.”
The six investors described in the indictment were told their funds were
conservatively invested in publicly traded companies and in bonds. Spangler
allegedly provided them misleading statements over time, falsely describing the
value of their accounts and how the money was invested. When investors sought to
liquidate their holdings, Spangler was unable to provide them any funds, because
the money had been funneled to the high risk start-up ventures that were not
According to the indictment, Spangler established a variety of funds as early
as 1998 to pool investor money to buy publicly traded stocks and bonds. Spangler
co-founded the two startup companies in the early 2000s—Tamarac Inc. in 2000 and
TeraHop Networks Inc. in 2002. Tamarac Inc. is headquartered in Seattle and
provides software to financial planners. TeraHop Networks Inc. is headquartered
in Georgia and manufactured wireless devices used to monitor the location and
activity of people and physical assets such as construction equipment. TeraHop
has ceased operation. Spangler not only failed to disclose to his investors that
he was diverting significant amounts of their funds to TeraHop and Tamarac, but
he also failed to disclose that he was involved in the management of these
companies, had an ownership interest in Tamarac, and was receiving payments from
both companies. The indictment contains an order of forfeiture, which will be
used to try to recover assets for the investors.
The case is being investigated by the FBI and Internal Revenue Service
Criminal Investigation (IRS-CI).
The case is being prosecuted by Assistant United States Attorneys Mike Lang
and Carl Blackstone.
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