CEDAR RAPIDS – An Indiana man who defrauded Iowa investors and an Iowa business was sentenced on March 27, 2013, to more than eight years in federal prison.
Lowell Gene “Bob” Hancher, age 59, from Sheridan, Indiana, received the prison term after an October 26, 2012, guilty plea to one count of wire fraud and one count of securities fraud.
In a plea agreement, Hancher admitted that, between about April 2005 and January 2010, he fraudulently obtained money from investors that was supposed to be invested in connection with a public stock offering. Some of the investors lived in northern Iowa. The purported stock offering was for Scott Contracting, Inc.; a privately-held utilities, asphalt and general contracting firm based in Henderson, Colorado. Hancher misappropriated a portion of the investors’ funds rather than investing the funds as promised.
Also in the plea agreement, Hancher admitted that, between about September 2009 and January 2010, he defrauded Cycle Country Accessories Corporation (Cycle Country); a publically-traded Nevada corporation with headquarters in Spencer, Iowa. Cycle Country designed and manufactured accessories for all-terrain vehicles and golf carts. Hancher was the chairman of Cycle Country’s board of directors. Hancher abused his board position to cause Cycle Country to give Hancher over $500,000 under the guise of a program to take Cycle Country private through a stock buyback. Hancher misappropriated the vast majority of the money provided for the buyback.
Hancher was sentenced in Cedar Rapids by United States District Court Judge Mark W. Bennett. Hancher was sentenced to 97 months’ imprisonment. A special assessment of $200 was imposed, and he was ordered to make $3,139,232.00 in restitution to the victims of his offenses. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Hancher was released on the bond previously set and is to surrender to federal authorities on a date yet to be set.
The case was prosecuted by Assistant United States Attorney Peter Deegan and was investigated by the Federal Bureau of Investigation in cooperation with the Chicago Regional Office of the Securities and Exchange Commission.