Ben Schmidt, the Ben of the notorious Ben-Mar Investments scam of the early 1990s, was indicted Wednesday — not on charges of defrauding investors, but because authorities say he removed fixtures and appliances from the Crestview Hills house he surrendered in a bankruptcy action in 1998.

        A federal grand jury in Cincinnati indicted Mr. Schmidt on two counts, one of bankruptcy fraud and the other of obstructing justice by hiding the items removed from the house. If convicted, he faces a total of 15 years in prison and fines of up to $500,000.

        Although his partner Mark Batch was convicted of criminal charges and spent 2 years in prison, Mr. Schmidt previously had not been charged with any crimes. Ben-Mar collapsed in 1995, owing about $12.2 million to 365 people, mostly Northern Kentuckians.

        But the Securities and Exchange Commission and a U.S. Bankruptcy Court trustee, Richard Nelson of Cincinnati, filed civil lawsuits seeking reparations from Mr. Schmidt, 68. The SEC won a $2.9 million judgment against Mr. Schmidt, who now lives in St. Petersburg, Fla. In July, he avoided going to jail on a contempt-of-court order by paying the $48,933 that had accrued in delinquent restitution to the SEC.

        Mr. Schmidt settled the bankruptcy claim by giving the court title to his $680,000 house in Summit Lakes, the same neighborhood as his friend, retired builder Tony Erpenbeck, and Mr. Erpenbeck's son Bill, who is now under investigation for bank fraud in the wake of the Erpenbeck Co. insolvency. But when Mr. Nelson visited the house, it had been stripped of appliances, fixtures, lighting, moldings and even landscaping.

        “The trustee works diligently to protect the value of assets for the benefit of creditors,” said Gregory Lockhart, U.S. attorney for the Southern District of Ohio. “Attempts to hide or destroy the assets' value must be punished.”

        Mr. Nelson sold the Schmidt house for $481,000, and the bankruptcy judge ordered Mr. Schmidt to pay $100,000 in damages. He hasn't. His lawyer, Ed McTigue of Cincinnati, said someone else trashed the house. Mr. McTigue could not be reached for comment on the indictments.

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