A Bellefonte man who allegedly raised more than $1 million through a Ponzi scheme is now the subject of a civil lawsuit filed by the Securities and Exchange Commission.
According to the lawsuit, James Hocker, 48, raised about $1.27 million from about 25 investors between 2013 and 2017 by guaranteeing returns between 10 and 30 percent, as first reported by PennLive.
Hocker used the money for personal living expenses and primarily relied on elderly retirees, individuals nearing retirement or widows, according to the SEC.
Hocker left an insurance agency in Milroy in 2007 and then began selling insurance products and annuities under the name James E. Hocker & Associates, which was not registered with the SEC.
Sign Up and Save
Get six months of free digital access to the Centre Daily Times
At least 11 investors were given printouts of historical S&P 500 prices and Hocker made explicit or implied promises that he would invest the funds in the S&P 500, which he never did, according to the SEC.
Many investors met with Hocker on an annual basis to review their investments. When investors requested their money back, Hocker would dissuade them and tell them that their money was unavailable or failed to respond. Some were repaid small amounts, according to the SEC.
Hocker allegedly received $262,000 from investors from December 2015 to March 2016. He used more than $64,000 to pay other investors, more than $24,000 to pay credit card bills, more than $20,000 to make payments to his ex-wife, more than $14,000 to repay personal loans and more than $3,000 at casinos.
The remaining money was used for other expenses, such as bill payments, retail purchases and tax payments, according to the SEC.
"Hocker's investment scheme bears the hallmarks of a Ponzi scheme," the lawsuit said. "Hocker raised more than $1 million from investors through false statements and deceptive conduct; contrary to his representations to investors, he failed to invest their money or produce any profits for them; and the source of payments to investors was cash infused by other investors."
Bridgett McCloskey, a 73-year-old Bellefonte woman who recently retired and invested with Hocker, said she is glad "they're finally getting around to doing something."
"If he would be able to give me my whole money back, I wouldn't care what they did with him. I think he should sit in jail until he can bring that money out of hiding and give it back to everybody," McCloskey said. "He did this to people who didn't know a whole lot about investments. I certainly didn't."
She said her involvement with Hocker has changed her spending habits.
"I've saved all that money so that I would have it after retirement and I wouldn't have to skip and scrape. Now that he's done that, I've got to watch where I spend," McCloskey said.
Paul Kisslinger, one of two attorneys for the SEC, said jail time is not a possibility in a civil lawsuit. He declined further comment.
Hocker, however, remains the subject of a criminal investigation that was led by the FBI and the United States Attorney's Office for the Middle District of Pennsylvania.
Hocker refused to produce documents or answer substantive questions pursuant to the SEC's investigatory subpoenas, according to the complaint that was filed in U.S. Middle District Court on Thursday.
He also declined to comment on Friday. Leonard Ambrose, Hocker's attorney, did not respond to a request for comment.
The SEC requested Judge Matthew W. Brann to enjoin Hocker from the illegal activity, return the "ill-gotten gains," impose civil monetary penalties and grant further relief that the court may find appropriate.