Mark Spangler is accused of secretly investing clients' money in risky startups in which he or his business had an ownership interest.

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Criminal and civil charges have been filed against Mark F. Spangler, a Seattle-based investment adviser accused of defrauding clients by secretly investing their money into two risky startups in which he or his investment firm had an ownership interest.

A federal grand jury Thursday indicted Spangler on 23 criminal counts, including wire fraud, money laundering and investment-adviser fraud, according to the U.S. Attorney’s Office.

Parallel civil charges were filed by the Securities and Exchange Commission, which accuses him of funneling about $47.7 million of his client’s money into these private ventures, “despite representing that he would invest primarily in publicly traded securities,” according to an SEC news release.

Spangler’s attorney, Jon Zulauf, said in a statement: “Mark Spangler cooperated with the government’s investigation. He met with the government’s lawyers. He answered their questions. He provided all of the documentation they requested. We are disappointed that charges were filed. In the coming days, we will carefully review the charges and start to prepare an appropriate defense.”

Spangler, 57, who ran an investment firm called The Spangler Group, is a former chairman of the National Association of Personal Finance Advisors and had received the group’s Distinguished Service Award.

He had raised more than $56 million from his clients since 1998 for several private investment funds he managed, according to the SEC.

Beginning around 2003, the SEC alleges, Spangler and his firm began diverting his client’s money into two private technology companies he had created called TeraHop Networks and Tamarac.

Clients claimed Spangler put nearly $42 million of their money into TeraHop, an Atlanta-based company that made wireless devices used to monitor the location of physical assets and personnel in construction and other industries. TeraHop, for which Spangler served as chairman and CEO, failed last year.

Tamarac, headquartered in Seattle, provides software to financial planners. Spangler was its chairman until February 2011.

The SEC also alleges Spangler did not tell investors his firm collected fees for financial and operational support from Tamarac and TeraHop — money that had originally come from his investment clients.

That meant Spangler and his firm “secretly reaped $830,000 from the companies in addition to any management fees that TSG received from clients,” the SEC says.

Spangler apparently disclosed his diversion of client funds only after he placed his firm and the funds he managed into state court receivership in 2011.

The SEC is charging Spangler and his firm with violating the antifraud provisions of the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. The complaint seeks financial penalties and injunctive relief, among other things.

The U.S. Attorney’s Office said 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 the U.S. Attorney’s Office said will be used to try to recover assets for the investors.

The maximum penalty for wire fraud is 20 years in prison, the maximum for money laundering is 10 years and the maximum for investment-adviser fraud is five years.

Information from The Seattle Times archives was used in this report. Janet I. Tu: 206-464-2272 or jtu@seattletimes.com. On Twitter @janettu.