Flying high in Cocktail Cove

Here she was this past March, out in the rain, literally and figuratively, and, according to her, holding the bag. Michelle Schrenker's estranged husband Marcus was the one in custody, accused of bilking clients and then attempting to fake his own death.

The state of Indiana had frozen Marcus' assets. And in a civil case, a judge ordered Marcus to pay more than half a million dollars in fines and restitution to victims of his annuity scheme.  Michelle's assets were frozen as well.

She, however, claimed she was utterly penniless, had to rely on gifts from friends even to buy food for her three children. 

She felt like a virtual prisoner, she said, here in the big house on cocktail cove.

Michelle Schrenker: "I have nothing.  I have nothing of my own."

But not everyone was quite so sure Michelle was a victim. Investigator Lisa Harpenau:

Lisa Harpenau, Indiana Dept. of Insurance: I believe that she very well knew what was going on, and if she didn't know what was going on, then she intentionally turned a blind eye."}

So, like Ruth Madoff, the wife of fraud king Bernie Madoff, Michelle fought back against the idea that she was a party to any fraud.

Michelle Schrenker: These funds went other places, not to me. I know that I haven't done anything.

Keith Morrison: A lot of people don't believe you.

Michelle Schrenker: I know.

Keith Morrison: They vilify you.

Michelle Schrenker: Uh-huh.

Keith Morrison: They think you're lying. They think you must have been in on it.

Michelle Schrenker: That's unfortunate. I mean, I don't know what else to do but tell the truth and that's what I'm doing.

Keith Morrison: Did you know he was in trouble with the law?

Michelle Schrenker: No.

Keith Morrison: Did you know his business was tanking?

Michelle Schrenker: No.

How could she not have known? Michelle says it's because all she could think about back then was her husband's extra-marital affair:

Michelle Schrenker: My mind was occupied with keeping my marriage and my family together, and making sure my children are okay. ‘Cause my family was in complete turmoil.

But years earlier, in that Web site promo tape, Michelle certainly seemed to have a hand in running the firm. She says she simply read from a teleprompter.

Keith Morrison: So as you read from the teleprompter the script that he wrote for you, did you at any point say, uh, Marcus, I don't do that stuff?

Michelle Schrenker: Yeah, a little bit.  But I just kind of go along with it, and you think it's not hurting anything.

Todd Rokita: She was the chief financial officer of his company. And she lived a beautiful life.

Indiana Secretary Of State Todd Rikita: The ill-gotten gain that this family lived on, for years, is reason to try to get the assets that are left back into the hands of those who have been hurt. 

Indeed, there are some eyebrow-raising checking account records. Around the holidays, including the very day she was dealing with her divorce, Dec. 30, and the day her house was raided, Dec. 31, she cashed out more than $70,000 from the corporate account.

Keith Morrison: You made some withdrawals from the bank accounts, during that period, like $5,000 here, $10,000 there, and so on.

Michelle Schrenker: Well, they weren't withdrawals. They were just transfers he had asked me to make to other accounts, prior to the end of the year, to get bills paid.

Keith Morrison: You see, though, people will see numbers on a page they'll say, “Aha! I see what's going on. She's stealing money from the company because he's taking off with a girlfriend, and she's gonna get a divorce and she's kinda squirreling away some money to get the hell out of there.”

Michelle Schrenker: I can understand why people look at it that way, but that's not what happened at all.  Not at all.

Outside court one day, Michelle cast herself as a victim  - as much of a victim as any of Marcus' clients.

Keith Morrison: Does it worry you sometimes when you're trying to go to sleep at night, that because of this title of CFO, you could spend time in jail, lose your kids, lose everything?

Michelle Schrenker: I worry about it, but I know I haven't done anything. I haven't done anything. I went in and I paid some bills. And I had a title. I didn't act as a CFO. That is not what I did at all.

Michelle's attorney, Mary Schmid: The fact that she had the title of CFO and not the duties of an acting CFO makes a huge difference. Her duties were to go into the office a couple days a week, pay bills from whatever accounts Marcus told her there were funds to pay with, and go home and be a Mom.  

She'll still be a mom, but not here. In July, Michelle and the kids had to move out of the big house on Cocktail Cove. Neighbor Pat Carlini:

Pat Carlini: I think he has about two million into it. They wanted 1.6 and I think they got just over 1.1 million.

Keith Morrison: Bargain basement price.

Pat Carlini: It was a bargain. It was a steal for somebody.

Pending a judge’s approval, the proceeds are going to repay fleeced investors. As for Michelle, we caught up with her a few weeks ago in downtown Indianapolis.

Keith Morrison: How are you hanging in there?

Michelle Schrenker: I'm just-- taking it a day at a time.

Turns out Michelle wanted to talk to us again.  Especially about these documents from the Schrenker investigation.

In interviews with investigators, Marcus' former business associate,  a whistleblower in the case, said that when it came to Michelle's chief financial officer job, "It is just like I had, a glorified title where I was just a support person".

When asked if Michelle had training or experience, the whistleblower said, "As far as I know, my impression of Michelle is a victim."

Michelle Schrenker: That's the most important thing for me to get out.  Because that really does exonerate me, and that's what I've been trying to do for so long, that's the part of the story that I've been trying to get people to understand about me.  And I've known they've had it for so long, and I've just been hoping it would surface.

And then, in a written statement last week, the spokesperson for Indiana's Secretary of State Todd Rikita confirmed "Officially, she is not being charged at this time."

Michelle hopes her name will be cleared.

Keith Morrison: What would you say to people about a situation like this?

Michelle Schrenker: I wish people wouldn't judge so quickly.  You know, I've-- you know, guilt by association is not always true.  And I-- you know so many people have been judging me based on the fact-- that it's, you know, what they've read in a newspaper or--

For Marcus Schrenker, it's another story. Last week, he was sentenced to more than four years in prison after he pleaded guilty to federal charges of crashing his plane intentionally and making a false distress call.  In an emotional statement, Schrenker apologized to his family, air traffic controllers, and residents of the area where his plane crashed and narrowly missed several homes.

"To this day I cannot believe I could do something so reckless and selfish," he told the judge. And soon, he'll be moved to Indiana to face nine new security fraud charges on top of two charges he already faced.

They flew so high, and then it all came crashing down.

Keith Morrison: You know him probably better than anybody, in spite of the lies.   What happened to him?

Michelle Schrenker: I wish I knew.  I don't know.

Keith Morrison: Did he want too much?  Were his ambitions too big?

Michelle Schrenker: I can only guess, trying to fill holes with things.  I don't know, ‘cause it sure wasn't buying happiness.

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