Litigation Release No. 22661 / March 29, 2013

SEC v. Lowell Gene "Bob" Hancher, et al., 11-cv-04005 (N.D. Iowa).

"Bob" Hancher Sentenced to Over 8 Years in Prison and Ordered to Pay Restitution of Over $ 3.1 Million

The Securities and Exchange Commission (SEC) announced that on March 27, 2013, in a criminal action brought by the U.S. Attorney's Office for the Northern District of Iowa, the Honorable Mark W. Bennett sentenced Lowell Gene "Bob" Hancher to 97 months in prison on one count of wire fraud and one count of securities and commodities fraud and ordered Hancher to pay $3,139,232 in restitution to his victims. Judge Bennett also ordered Hancher to be placed on five years of supervised released following the completion of his prison sentence. [USA v. Lowell Gene Hancher (a/k/a "Bob" Hancher), Case No. 12-CR-4090, USDC, N.D. Iowa].

The $3.1 million restitution amount includes funds that Hancher stole from investors in a fraudulent stock offering he led on behalf of Scott Contracting, Inc., a Colorado construction company, and funds that Hancher misappropriated from Cycle Country Accessories Corporation, an Iowa manufacturer of accessories for all-terrain vehicles and golf carts, while serving as a member of Cycle Country's board of directors and audit committee.

In January 2011, the SEC filed a civil injunctive action against Hancher for defrauding the Scott Contracting investors, misappropriating funds from Cycle Country and engaging in a manipulative stock trading scheme involving shares of a third company. On January 19, 2011, Judge Bennett in the Northern District of Iowa entered an order permanently enjoining Hancher from violating or aiding and abetting violations of the antifraud provisions of the Securities Act of 1933 and the antifraud and books and records provisions of the Securities Exchange Act of 1934 and ordering him to pay disgorgement plus prejudgment interest of $2,988,405 and a civil penalty of $130,000. Hancher consented to the entry of the order which also barred him from serving as an officer or director of a public company or participating in a penny stock offering. On May 18, 2011, the SEC also barred Hancher from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization.