Evansville investment adviser facing security fraud charges

Accused of swindling more than $1 million

EVANSVILLE, Ind. - An Evansville investment adviser’s unexplained disappearance this spring triggered an investigation leading to his arrest on charges that he swindled more than $1 million from at least a dozen area residents.

Lynn A. Simon, 62, of Newburgh, is facing three counts of securities fraud, Class B felonies, and a charge of unlawful sale of a security, a Class C felony.

Simon surrendered at the Vanderburgh County Jail on Tuesday, his attorney Michael Keating told the Evansville Courier & Press .

Several of those who lost money, according to court records, were elderly, including one Posey County couple that lost $50,000 they invested intending to use it for retirement.

The actions that lead to Simon’s arrest came to light in April after his wife reported to the Warrick County Sheriff’s Office that Simon had been missing for two days, according to court records.

Then in May, an Evansville resident filed a complaint with the Indiana Secretary of State’s office that he had stopped receiving interest payments on his investment with Simon and that Simon’s wife told him Simon had been missing two weeks, according to court records.

On the same day, Simon’s wife told a Warrick County Sheriff’s Office detective that Simon had called her and said that he had “done some things” and could not return home.

According to court records, Simon was a registered investment adviser with CFD Securities in Kokomo, Ind., and operated a satellite office in Evansville under the name Financial Security Planning. Simon was the sole owner of Financial Security Planning as well as The Insurance Shoppe, said Valarie Kroeger, a spokeswoman for the Secretary of State’s office, which regulates the securities industry in Indiana.

Investigators traced Simon to Alabama and then New Mexico, and on Aug. 26, the Vanderburgh County Prosecutor’s Office obtained a warrant for his arrest. Simon turned himself in this week as agents of the Secret Service and local police officers were attempting to locate him and serve the warrant.

He is being held in lieu of $10,000 cash bail and ordered to surrender his passport and be placed on electronic house arrest if he posts bail. A preliminary not guilty plea has been entered for him.

Simon’s arrest affidavit detailed a scheme in which he is believed to have solicited investments for a private fund he allegedly operated in return for higher rates of returns on investment — sometimes guaranteeing return rates as high as 11 percent.

Investigators reported that Simon would issue typewritten promissory notes that showed a rate of return at a specified maturity date. But Simon also would note to investors that if they requested money that it would be given in the order received and only if there was enough money coming into the fund.

Simon did not register with the state any of the investments discovered in the investigation which were sold under the Financial Security Planning name, as required by state law, according to the arrest affidavit.

In addition, bank records did not show any money going to investments or insurance companies as purported by Simon. Instead, according to the affidavit, the records showed investor money going in 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 the day before his wife first reported him missing.


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