The six investors described in the indictment were told their funds were conservatively invested in publicly traded companies and in bonds. Spangler allegedly provided them misleading statements over time, falsely describing the value of their accounts and how the money was invested. When investors sought to liquidate their holdings, Spangler was unable to provide them any funds, because the money had been funneled to the high risk start-up ventures that were not profitable.
According to the indictment, Spangler established a variety of funds as early as 1998 to pool investor money to buy publicly traded stocks and bonds. Spangler co-founded the two startup companies in the early 2000s—Tamarac Inc. in 2000 and TeraHop Networks Inc. in 2002. Tamarac Inc. is headquartered in Seattle and provides software to financial planners. TeraHop Networks Inc. is headquartered in Georgia and manufactured wireless devices used to monitor the location and activity of people and physical assets such as construction equipment. TeraHop has ceased operation. Spangler not only failed to disclose to his investors that he was diverting significant amounts of their funds to TeraHop and Tamarac, but he also failed to disclose that he was involved in the management of these companies, had an ownership interest in Tamarac, and was receiving payments from both companies. The indictment contains an order of forfeiture, which will be used to try to recover assets for the investors.
FBI press release link: here