Indiana Man Guilty of Defrauding Iowans
|U.S. Attorney’s Office October 29, 2012|
A man who defrauded Iowa investors and an Iowa business pled guilty on October 26, 2012, in federal court in Cedar Rapids.
Lowell Gene “Bob” Hancher, age 59, from Sheridan, Indiana, was convicted of one count of wire fraud and one count of securities fraud.
In a plea agreement, Hancher admitted that, between about April 2005 and January 2010, he fraudulently obtained money from investors that was supposed to be invested in connection with a public stock offering. Some of the investors lived in northern Iowa. The purported stock offering was for Scott Contracting Inc., a privately-held utilities, asphalt, and general contracting firm based in Henderson, Colorado. Hancher misappropriated a portion of the investors’ funds rather than investing the funds as promised.
Also in the plea agreement, Hancher admitted that, between about September 2009 and January 2010, he defrauded Cycle Country Accessories Corporation (Cycle Country); a publically traded Nevada corporation with headquarters in Spencer, Iowa. Cycle Country designed and manufactured accessories for all-terrain vehicles and golf carts. Hancher was the chairman of Cycle Country’s board of directors. Hancher abused his board position to cause Cycle Country to give Hancher over $500,000 under the guise of a program to take Cycle Country private through a stock buyback. Hancher misappropriated the vast majority of the money provided for the buyback.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Hancher was released on bond pending sentencing. Hancher faces a possible maximum sentence of 45 years’ imprisonment; a fine equal to the greater of twice the gross gain resulting from the offenses, twice the gross loss resulting from the offenses, or $500,000; $200 in special assessments; and eight years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Peter Deegan and was investigated by the Federal Bureau of Investigation in cooperation with the Chicago Regional Office of the Securities and Exchange Commission.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 12-4090 MWB.