Bentonville man pleads guilty in investment scheme

Arkansas Business, May 19, 2008 by Gwen Moritz

A Bentonville man who helped bilk more than $350,000 out of 32 investors pleaded guilty in U.S. District Court in Fayetteville to one count of mail fraud.

Leroy Hoback, who waived indictment and agreed to cooperate with federal prosecutors, was one of six people involved in an investment scheme that promised returns ranging from 3 percent per month to 8 percent per day through investments in foreign currency.

He faces up to 20 years in prison and a fine of up to $250,000; sentencing has not been scheduled.

Hoback was acquitted last year on a federal fraud charge in an unrelated case.

"Mr. Hoback now will have a conviction on his record that will serve as a warning to all in the future who might be asked to do business with him," Assistant Securities Commissioner Theodore Holder said in a written statement last week.

The Arkansas Securities Department in 2005 issued a cease-and desist order against Hoback and his business partner, O. Bruce Mikell of Warrior, Ala., who operated a company called Fortress Foundation Inc. Also named in the order were four associates in Houston: Raymond M. Streig, William E. Schwerdtfeger, Gloria N. Streig and Ra'Nic Streig Schwerdtfeger.

Hoback is the first to be charged with a crime in connection with the scheme, although the Securities Department investigation found that the primary beneficiaries were the Streigs and Schwerdtfegers, who were supposed to do the currency trading with money that Hoback and Mikell raised through a series of seminars held at the AmeriSuites hotel in Rogers.