Tyler resident and Masters track athlete Robert B. Hahn faces up to 20 years in federal prison after pleading guilty Thursday to wire fraud and money laundering in federal court.
Based on information presented in court, Hahn, 64, a former insurance agent, devised and executed an almost $5.5 million fraud scheme, according to a news release from the U.S. Attorney's Office, Eastern District of Texas.
From January 2007 to February 2015, he claimed to represent a group of Tyler doctors "who were raising capital for debt retirement, construction of, or improvements to, health care facilities, and medical equipment purchases," according to the news release.
Hahn led about 100 potential investors to believe these doctors would pay an annual interest rate of 20 percent on their loans or investments.
He then collected funds from these investors and deposited the funds into his insurance business or personal checking accounts, according to the news release.
He periodically made "interest" payments, in cash, to these individuals, representing a 20 percent return on the fictitious loans or investments.
He used funds he had received from earlier investors to make these payments, the news release reads.
When requested, Hahn returned principle loan or investment funds to the investors in the form of a check drawn on his insurance or personal checking accounts. Funds received from other investors financed this.
"Hahn admitted that in truth and in fact, there never was a group of doctors raising capital for debt retirement, construction of, or improvements to, health care facilities, and medical equipment purchases," according to the news release. "Hahn admitted he simply made up this story to obtain and maintain funds for his personal use."
As a result of the scheme, he collected almost $5.5 million from individual investors.
To further the scheme, Hahn returned or distributed approximately $4 million in proceeds from the fraud scheme to some of the investors in the form of returned "principle" and "interest" or "earnings," according to the news release.
A sentencing date for Hahn has not been set. His case was investigated by the Federal Bureau of Investigation, Tyler Office; the Internal Revenue Service, Criminal Investigations Division; the Texas State Securities Board, and prosecuted by Assistant U.S. Attorney Jim Noble.
Hahn attended Bell Elementary School, what was then named Moore Junior High School and graduated from Robert E. Lee High School in Tyler.
At Lee, he was chosen as All-East Texas in the 120-yard high hurdles and started at safety for the football team.
He attended John Brown University in Siloam Springs, Ark., on a track scholarship and there he set school records, was a national champion and received All-American honors.
He was active as a Masters track competitor and competed in numerous Masters national and world championships. In 2007, he won a Masters world championship.
In 2014, he competed in the World Masters Indoor Track and Field Championship in the 60- to 64-age group and he had set his sights on the 2017 world championships in South Korea.
Alexandra Dominguez contributed to this report.