Former Financial Advisor Charged with Defrauding Client in Private Investment Scheme

SPRINGFIELD, Ill. – A federal grand jury has indicted a Champaign, Ill., man who previously worked as a financial advisor at a bank with falsely representing a private investment scheme to a customer that resulted in the client losing money. The indictment charges Paul Schuerger, 44, of the 2700 block of Hunters Pond Run, with mail fraud and money laundering.

A summons will be issued for Schuerger’s initial appearance in federal court in Urbana on a date to be scheduled by the U.S. Clerk of the Court.

According to the indictment, in early 2012, when Schuerger was working at a Kankakee bank as a financial advisor, he allegedly falsely represented to a bank customer that he had a private investment opportunity that would provide a 10 percent rate of return. The customer gave Schuerger $100,000 to invest as Schuerger proposed. As part of the scheme, Schuerger allegedly provided the customer with a private agreement that, in the event of default, guaranteed the customer equity rights totaling approximately $155,000 for two properties, when, in fact, Schuerger did not have such equity in the properties.

Instead of investing the money, the indictment alleges that Schuerger deposited the money into a personal bank account. Within a month, Schuerger had allegedly spent nearly all the customer’s investment of $100,000 for his personal benefit, including to pay off personal debts. According to the indictment, from April 2012 to March 2016, Schuerger lulled the customer into a false sense of security by sending the customer monthly payments by mail in the amount of $833. In May 2016, Schuerger filed a Chapter 13 petition for bankruptcy.

If convicted, the statutory maximum penalty for each count of mail fraud (five counts) is 20 years in prison, and a fine of up to $250,000; for the offense of money laundering (one count) the maximum statutory penalty is up to 10 years in prison.

The FDIC Office of Inspector General conducted the investigation. Assistant U.S. Attorney Eugene L. Miller is prosecuting the case.

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.