The U.S. Securities and Exchange Commission is alleging a Watertown, Wis., insurance agent ran a $10 million Ponzi scheme out of his agency, ISC Inc.
The SEC filed a securities fraud lawsuit against 69-year-old Loren Holzhueter and one of his companies. A federal judge froze Holzhueter’s assets in response.
The lawsuit alleges at least 122 investors were told “a wide array of lies” by Holzhueter.
An application for a search warrant of Holzhueter’s offices filed by the Internal Revenue Service alleges that from January 2009 through August 2013, “approximately $7.5 million in suspected investor funds were paid to ISC in the form of checks. The investigation shows that Holzhueter has engaged in money laundering transactions by misusing monies received from investors on the pretext that he would invest the monies.”
The investor funds were intermingled with other ISC revenue, according to the SEC. Investor funds were then used to pay business and payroll expenses, as well as for Holzheuter’s personal use, federal officials said.
ISC is a full service insurance brokerage offering personal and business insurance plans — both property/casualty and life/health — as well as group benefits, according to documents filed with the U.S. District Court for the Western District of Wisconsin. The firm also offers investment services and pension plans for individuals and small businesses.
The agency is located at 117 Oakridge Court in Watertown.
Holzhueter’s attorney, Stephen Kravit, tells the Milwaukee Journal Sentinel the money given to Holzhueter were loans and not investments. Kravit denies that Holzhueter was running a Ponzi scheme.
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