Former girlfriend: Ind. financier was suicidal

[January 31, 2009]  NOBLESVILLE, Ind. (AP) -- A former girlfriend of indicted money manager Marcus Schrenker testified Friday that he was suicidal a week before he crashed his airplane into the Florida Panhandle in an attempt to fake his death.

Kelly Baker also testified Friday in an Indiana court that in the month before the Jan. 11 crash, Schrenker gave her tens of thousands of dollars in gifts and money for furnishings for an apartment they shared.

The former girlfriend was testifying on behalf of Schrenker's estranged wife, who was trying to keep her personal assets from being put into receivership by the court while her husband's former investors try to recover some of the money prosecutors claim he stole.

At the end of the hearing, Judge J. Richard Campbell extended a temporary restraining order freezing the personal assets of both Schrenkers and three companies Marcus Schrenker operated. He also put all of Marcus Schrenker's personal and company funds into a receivership overseen by former state securities commissioner Wayne Davis.

An attorney for Michelle Schrenker, Bradley Skolnik, argued that her assets should not be put into receivership because there was no evidence she was complicit in her estranged husband's financial dealings.

The judge gave the two sides until Tuesday to submit proposed findings on Michelle Schrenker's personal assets, including a luxury home in Indiana and several automobiles.

Last week, an administrative law judge permanently revoked Schrenker's Indiana insurance license. There was no one representing Schrenker at Friday's hearing.

Prosecutors said Baker's testimony and that of other witnesses provided insights into Schrenker's character as he used money he allegedly defrauded from clients to finance his own lavish lifestyle.

"We had a romantic relationship," Baker said. "He was with me but very unstable."

She said the relationship ended in August, but he continued to lavish gifts on her through the end of the year. She had seen him as recently as a week before he parachuted out of his small plane over Alabama and let it crash.

Schrenker remains jailed in Florida, where he pleaded not guilty last week to charges of deliberately crashing his airplane Jan. 11 and making a false distress call. He was arrested Jan. 13 at a campground near Tallahassee, Fla.

At Friday's hearing, Baker testified that Schrenker bought her a $30,000 car, two Louis Vuitton handbags and a Vuitton watch worth more than $1,400. He leased a condominium for them in June, paying at least $30,000 in cash for the one-year lease, and giving her another $30,000 for furnishings. In September, he gave her $10,000 more to replace some of the furniture.

Throughout the hearing, attorneys for the state and for Michelle Schrenker battled over the state's contention that the estranged wife was a willing and knowledgeable partner in Schrenker's activities.

Her other attorney, Mary Schmid, argued that the state presented no evidence that Michelle Schrenker conspired with her husband other than his listing of her as chief financial officer of one of his companies. She said all Michelle Schrenker did was pay bills and manage the books for her husband.

However, Deputy Attorney General David Christoff said there was a "very serious possibility" that money managed by Marcus Schrenker ended up in assets now controlled by Michelle Schrenker.

"She was part of the company," Christoff said.

[Associated Press; By KEN KUSMER]

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