Carmel man sentenced for fraud, ordered to pay $5M in restitution


George McKown, 71, of Carmel was recently sentenced before U.S. District Court Judge Philip P. Simon on his conviction for wire fraud and conspiracy to commit securities fraud.

McKown was sentenced to 84 months in prison and ordered to pay more than $5 million in restitution to the victims of his schemes.

According to documents filed in the case, between 2008 and 2013, McKown partnered with Richard Gearhart to operate Asset Preservation Specialists, a company they claimed would make profitable market investments for its clients. McKown and Gearhart recruited more than 40 individuals to invest their savings, pensions, death benefits and IRAs with APS, ultimately collecting millions of dollars.

McKown, representing himself as president of APS, promised his investors there was no risk to their initial deposit, they would receive a return of 6 to 8 percent on their investments and, upon request, their initial investment would be returned within 30 days.

After receiving the investors’ money, McKown and Gearhart abandoned the plan to invest money in the market and began using their clients’ investments to fund their own personal business projects and projects of their associates.

The individuals, through APS, kept its investors in the dark about the losses by sending fraudulent financial statements and 1099s to investors, which falsely showed they were making a consistent profit on their investments. Through APS, the pair further continued to recruit new investors to hide the losses and keep the scheme afloat. Many of the victims first learned that APS had lost their savings when Gearhart filed for bankruptcy in 2013.

Gearhart pled guilty to conspiracy to commit securities fraud in December 2019. He was sentenced to five years imprisonment and ordered to pay more than $5 million in restitution in July 2021. McKown was convicted of his fraud offenses following a jury trial in October 2021.