Evansville investment adviser Lynn A. Simon appeared in Vanderburgh Circuit Court on Wednesday to plead guilty to charges stemming from allegations last year that he swindled more than $1 million from area residents.
Simon, 63, pleaded guilty to three counts of securities fraud, class B felonies, and a charge of unlawful sale of a security, a class C felony.
In deal worked out with an attorney for the Indiana Secretary of State’s Office -- which regulates the securities industry in the state -- Simon could be sentenced to two years in prison and eight years of work release if Judge David Kiely accepts the agreement.
The Secretary of State’s Securities Division assumed responsibility for Simon’s case through its Prosecution Assistance Unit, which assists law enforcement agencies in prosecuting white-collar criminals.
Local, state and federal law enforcement agents began investigating Simon in April 2013 after he was reported missing and the Indiana Secretary of State’s Office received complaints.
Simon was a registered investment adviser with CFD Securities of Kokomo, Indiana, operating a satellite office in Evansville under the name Financial Security Planning. He was the sole owner of Financial Security Planning as well as another business, The Insurance Shoppe.
Investigators reported Simon issued promissory notes that showed a rate of return at a specified maturity date, but that Simon also would tell investors that if they requested money it would be given in the order received and only if there was enough money coming into the fund, according to court records.
None of the investments discovered in the investigation, which were sold under the Financial Security Planning name, was registered with the state, as required by state law, according to his arrest affidavit.
Bank records did not show money going to investments or insurance companies as Simon said they were. Instead, according to the affidavit, records showed investor money was going into the account and then either going to other investors or being withdrawn by Simon.
Investigators said Simon was the only person authorized to use the account. In addition, the records showed more than $42,000 was withdrawn on day before his wife first reported him missing.
Investigators traced Simon to Alabama, then to New Mexico, and on Aug. 26, the Vanderburgh County Prosecutor’s Office obtained a warrant for his arrest. Simon surrendered at the Vanderburgh County Jail in September as Secret Service agents and local police were trying to locate him and serve the warrant.
