LAFAYETTE — A Lafayette man pleaded guilty Friday in a scam that federal prosecutors allege netted more than $5 million from a group of about 100 investors in Acadiana.
Herbert S. Fouke, a former contractor turned investment company president, faces up to 5 years in prison on a charge on conspiracy to commit securities fraud, investment adviser fraud, wire fraud and mail fraud.
A federal grand jury in 2011 indicted Fouke and businessman Richard Joseph Buswell, who pleaded guilty to a fraud charge in July.
Prosecutors have said that Buswell, who founded the Bowman Investment Group in 2006, promised big returns to clients who were never made aware that their money was being put in high-risk investments.
The company made its money off commissions, which climbed to more than $1.5 million.
Fouke had worked as a residential building contractor, and his initial association with Buswell was as a client of the Bowman Investment Group, according to a summary of the allegations filed by prosecutors to support the guilty plea on Friday.
Prosecutors said that Fouke later opted for a career change, joining Buswell to become president of the investment company and working to recruit clients.
Fouke was not accused of directly misleading investors but rather of not acting when he became aware that Buswell was not being straightforward with clients.
Buswell faces up to 20 years in prison when sentenced.
Any court-ordered restitution to victims would be determined at sentencing.
Buswell also pleaded guilty in July to unrelated federal charges for a synthetic marijuana business that began in 2011.
Prosecutors said he helped oversee the distribution of about $5 million worth of synthetic marijuana sold as “Mr. Miyagi” during 10 months in 2011 at Curious Goods, a smoke shop with franchises throughout Acadiana.