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Judge Orders Arrest of Pilot Accused of Faking Plane Crash, Authorities Charge Him With Financial Fraud

A judge ordered the arrest of a pilot accused of faking a distress call and parachuting out of his plane.

Authorities in Indiana charged Marcus Schrenker, 38, with financial fraud on Tuesday. Schrenker is from Indiana and his flight originated there.

Prosecutors say Schrenker acted as a financial adviser and made business transactions after his state license expired on Dec. 31.

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Investigators have been probing Schrenker's financial management businesses for possible securities violations, and searched his home and offices in the days before Sunday's crash. His wife also filed for divorce, and a judge in Maryland entered a half-million-dollar judgment against him.

An investor who had entrusted money to Schrenker said Tuesday he had complained to state regulators that the man was unfairly charging high fees and pocketing the money.

The complaints were yet another sign that Schrenker's life was crumbling around him in the weeks before he took off in his small plane, then apparently parachuted out over Alabama before leaving the plane on autopilot to crash in Florida.

The Indiana Department of Insurance had filed a complaint against Schrenker on behalf of seven investors last January that claimed he cost them more than $250,000 because he never told them they would face high fees to switch annuities. Investors said he cozied up to their families — then betrayed them.

"We've learned over time that he's a pathological liar — you don't believe a single word that comes out of his mouth," said Charles Kinney, a 49-year-old airline pilot from Atlanta who went to regulators on behalf of his parents, who invested $900,000 of their life savings with him.

A hearing in the case was scheduled for next week, when his license in Indiana could be revoked for life and he could face penalties.

Meanwhile, police in Alabama and U.S. Marshals say Schrenker stored a red motorcycle before he disappeared — and the bike is now missing.

Authorities learned that Schrenker stored a Yamaha motorcycle in Harpersville, Ala., on Saturday before he vanished. He told the manager of the storage unit that he'd be back on Monday to pick it up, FOX 59 in Indianapolis reported.

But when U.S. Marshals went Monday evening to search the storage unit, the bike was gone, Marty Keely, U.S. Marshal for the Northern District of Alabama, told FOX 59.

All that was found in the storage space were the wet clothes Schrenker was last seen wearing when he checked into — and left — a motel in Harpersville, according to the station. Schrenker is believed to have fled on the bike.

"We do have reason to believe he has made contact with a friend after he left with the motorcycle," Keely told FOX 59. "We are working closely with the Indiana authorities."

Harpersville Police Chief David Latimer said there's no reason to believe that Schrenker is still in Alabama.

"He could be anywhere at all. Within 10 hours he could be in New Orleans, halfway to Houston, in Atlanta, anywhere," Latimer said. "I believe he's out of the U.S. ... He's shown a total disregard for human life. I think he'd do anything to get away."

Schrenker, a high-flying Indiana businessman, appeared to have it all — money, luxury cars, airplanes — before he became the center of a heated manhunt.

Federal marshals on Tuesday intensified their search for Schrenker, who they believe faked a distress call before parachuting from his plane over Alabama, leaving the aircraft to crash more than 200 miles away in Florida.

Schrenker disappeared into the woods southeast of Birmingham after jumping from his single-engine Piper Malibu, which continued on autopilot until it crashed Sunday night near a residential area in the Florida Panhandle.

The only sign of Schrenker came in an e-mail to a neighbor calling the situation a misunderstanding.

U.S. Marshals spokesman Michael Richards in Birmingham said the agency was actively searching for Schrenker, although he declined to detail where agents are looking or how the search is being conducted.

Investigators in Florida said Schrenker faces a host of possible charges if it turns out he deliberately abandoned the plane.

"You just can't let an unmanned aircraft just maliciously fly into a residential area without facing any consequences," said Santa Rosa County Sheriff's Office spokesman Scott Haines.

Schrenker lived a lavish life as an investment manager and an experienced recreational pilot who performed aerial stunts.

He bought luxury automobiles, two airplanes and a $4 million house in an upscale neighborhood known as "Cocktail Cove," where affluent boaters often socialize with cocktails in hand.

But in reality, Schrenker's life appeared to be spiraling downward. He lost a half-million-dollar judgment against one of his companies, and his wife filed for divorce. Investigators probed his businesses for possible securities violations.

The descent seemed complete after he apparently faked a distress call, bailed from his plane and left it to crash in a Florida swamp. In the ominous e-mail message he apparently sent, he told a friend the situation was a misunderstanding and warned: "I embarrassed my family for the last time."

Neighbor Tom Britt said he received the e-mail Monday night from Schrenker claiming the crash was an accident and saying he wanted the companies under investigation to succeed. Britt believes the e-mail that alludes to suicide is real, but its authenticity hasn't been verified.

Britt quoted Schrenker as saying, "By the time you read this I'll be gone."

Britt said the e-mail seemed to be a last goodbye.

"He wanted to express remorse for what happened," he told FOX News on Tuesday. "It was kind of his final note to us. He wanted to set the record straight. ... I got the impression he was going to take his own life."

Britt said Schrenker asked him to convey the message that he felt badly for what he'd put his family through. Britt e-mailed his friend back and tried calling him on his cell phone but got no response.

"I said, 'Call me, we need to talk; don't do it,'" Britt told FOX.

The crash investigation began Sunday night, when Schrenker's plane went down en route to Destin, Fla., from Anderson, Ind. Schrenker had reported that the windshield imploded and that he was bleeding profusely, according to the Santa Rosa County sheriff's office.

After he stopped responding to air traffic controllers, military jets tried to intercept the plane. They noticed the door was open and the cockpit was dark. They followed it until it crashed in a bayou surrounded by homes.

But when investigators found the plane, its door was ajar and the wreckage showed no signs of blood or the blown windshield. The sheriff's office said Schrenker appeared to have intentionally abandoned his plane.

In the e-mail, Britt is asked to set the record straight and Schrenker says he's stunned after reading coverage of the case on the Internet. According to the e-mail, the accident was caused when the window on the pilot side imploded, spraying him with glass and reducing cabin pressure.

"Hypoxia can cause people to make terrible decisions and I simply put on my parachute and survival gear and bailed out," the e-mail reads.

Britt said that he believes the e-mail is real, and that its phrasing was consistent with other past messages he's received from Schrenker. However, the e-mail came from an account in Schrenker's name that he hadn't seen before.

Fearing the pilot intended to commit suicide, Britt turned the message over to authorities.

The e-mail was the latest in a series of strange twists in the case. Earlier Monday morning, a man carrying Schrenker's license told police in Childersburg, Ala. — about 225 miles from where the plane crashed — that he'd been in a canoe accident with friends. He was wet from the knees down.

The officers, unaware of the plane crash, took him to a hotel. He was gone by the time they returned. They learned he paid for his room in cash before putting on a black cap and running into the woods next to the hotel.

The e-mail also refers to that incident, saying he made up a name to check into the hotel.

"I did not tell them about what happened as I was embarrassed and scared," it reads.

Authorities in Indiana have said little about the investigation into Schrenker's businesses — Heritage Wealth Management Inc., Icon Wealth Management and Heritage Insurance Services Inc. — wealth management companies that provide financial advice.

Jim Gavin, a spokesman for Indiana's secretary of state, said investigators are looking at possible securities violations. Officers who searched Schrenker's home Dec. 31 were searching for computers, notes, photos and other documents related to those companies.

Court records show his wife, Michelle, filed for divorce a day before the searches.

Gavin said the Indiana Securities Division obtained a temporary restraining order Monday freezing Marcus and Michelle Schrenker's personal assets, and the assets of the three companies.

On Friday, two days before the crash, a federal judge in Maryland issued a $533,500 judgment against Heritage Wealth Management Inc., and in favor of OM Financial Life Insurance Co. The OM lawsuit contended Heritage Wealth Management should return more than $230,000 in commissions because of problems with insurance or annuity plans it sold.

Schrenker is an accomplished pilot with a background in aerobatics, said Ron Smith, an interim manager at Anderson Municipal Airport. He usually flies out of the airport about once a week, making regular trips to Florida, he said.

Click here for more on this story from FOX 59 in Indianapolis.

The Associated Press contributed to this report.