Zero Hedge

As the media whirlwind over the latest Ponzmaster becomes more and more acute, the disclosures about his past keep mounting to a point where what Madoff has done in comparison will likely soon seem tame. We all know by now the more recent events, but the pre-story that is unwinding is simply staggering. As Yahoo Finance has uncovered, his involvement can be found in such unexpected places as the Delta Airlines Bankruptcy Case.

Here is a rough attempt at a timeline of events:

- August 17, 2006: Marc Schrenker is listed as an Advisor in the Delta Pilots Pension Termination Opposition mission statement. Delta's Retired Pilots are fighting the debtor's attempt to stiff them and to virtually eliminate their pensions while in bankruptcy, which probably amounts to millions and millions of dollars. Schrenker manages to weasel his way in as a "protector" of their retiree's interests. The original filing by Delta of the Pension Termination Plan, which Schrenker was supposed to defend against, can be found here. Attorneys for the pilots, who also represent Schrenker at his deposition, is the law firm of Thelein Reid and Priest LLP of Washington DC (212-603-2000) with attorneys Sherwin Kaplan and Sara Pikofsky in Washington.

- August 25, 2006: deposition (here, here and here) of Robert Morrison, a retired Delta pilot, who is also unlucky enough to have been hired as an investment advisor by Schrenker (no salary, just commission), most likely to serve as an introductory liaison to the Delta Retiree Union. The deposition goes into great depths about the operation of Schrenker's business.

- August 27, 2006: at a deposition of Schrenker by Brian Weinstein and Rajesh James of Davis Polk (the original deposition seems to have been removed from the Delta docket where it would probably be found under Docket # 3163 for Southern New York Case 05-17923, most likely due to his August 30 termination of involvement in the pilot case (see below); Davis Polk lawyers presumably have a copy of the deposition) the following disclosures come to light:

In 1990, Schrenker is charged with receiving stolen property involving jewelry theft; documentation is presented that Schrenker spends 16 days in jail. Schrenker counters that he only receives probation for the offense and that record is later expunged;

In 1991 a Chapter 7 liquidation petition filed on Schrenker's behalf; MS counters the case was fraudulently filed by college frat brothers who took out several cards in his name;

Terminated from Multi Financial Securities, where he is registered from Dec. 18, 2000 to April 30, 2001, with cause, due to high volume of mutual fund switched and lack of documentation with properly completed acknowledgement letters (churning);

Around 9/11 several securities lawsuits are filed against him by prior clients; MS counters litigation was brought by one attorney representing 3 or 4 people who indicated MS "should have known the 9/11 events could have happened and accounts could have dropped (in his words)".

In 2003 the IRS files a court case against Schrenker in which he is accused of not disclosing thousands of dollars in income and not reporting income. Court trustee files documents alleging that in months prior to 2003 petition, MS buys more than $29,000 in audio/visual equipment and orders $16,000 worth of landscaping services, provided to his home, and MS is accused of fraudulent conveyance. MS claims all services are for his business and that "Trustee is obviously motivated to make it appear as we've done something fraudulent because they recover 33% of every dollar that they can squeeze out of these small companies."

Also in 2003, another Chapter 7 petition is filed on his behalf, which MS claims was fraudulently filed by his lawyer who had forged his signature;

Charles Kinney, an active Delta pilot began investing with Schrenker in mid-90s. Once learning about MS's past, Kinney approached Indiana insurance regulators on behalf of his parents, who invested their life savings into Nat Western Life Annuities thru Schenker. MS subsequently transfers the money into a different annuity account, without telling the parents, which costs them $135,000 in surrender penalties according to a December 2007 Indiana regulator complaint.

- August 30, 2006: Marcus withdraws from the Pilot Case and is a no show to the court hearing. The link to the Notice about Schrenker's withdrawal from the Delta Airlines bankruptcy docket is here. This is likely done so as to eliminate his deposition from Delta's docket which would likely incriminate him had it remained on the public record. His running away ruins the pilots' chances to successfully prevent pension plan termination, especially as Delta's financial advisor is Blackstone.