Army Staff Sergeant Robert Bales swindled an Ohio couple of more than $600,000 when he served as their stock broker in 2000, according to records of the Financial Industry Regulatory Authority.
An arbitrator in 2003 ordered Bales to pay more than $1.3 million in damages to Gary Liebschner of Carroll, Ohio, and his wife. By then, Bales was already in the Army, having enlisted in November 2001, less than two months after the Sept. 11 terrorist attacks, according to an Army statement.
Bales, 38, is suspected of killing at least 16 civilians in Afghanistan on March 11. He may face formal charges in U.S. military court as soon as this week, his lawyer, John Henry Browne, said in an interview yesterday.
Bales sold Liebschner’s AT&T Inc. (T) shares without his knowledge or authorization and purchased other securities, according to Earle R. Frost Jr., a Columbus attorney for Liebschner. Bales collected as much as $16,000 in commissions in a single day, Frost said in an interview.
Liebschner told WCPO TV, the ABC affiliate in Cincinnati, that Bales pocketed their money after they asked him to sell shares to cover medical bills. Bales never paid the money and the couple could never find him, Liebschner said.
A telephone message left with Liebschner wasn’t immediately returned, and there was no answer at his door today.
Fraud and Churning
Bales worked in financial services in Ohio from 1996 to 2000, according to Finra records. An arbitrator found that Bales “engaged in fraud, breach of fiduciary duty, churning, unauthorized trading and unsuitable investments,” according to a report on the Finra website.
Bales and the other respondents in the case didn’t appear for the hearing, said W. Sean Kelleher, a suburban Columbus attorney. Kelleher said in a telephone interview that he represented the firm’s compliance officer, who is now dead.
There was another complaint of unauthorized trading of bonds filed by an Ohio woman on June 9, 2000, according to a report provided by the state Commerce Department. The record shows Bales denied wrongdoing, Lyn Tolan, a department spokeswoman, said in a telephone interview.
In Bales’s response, he said the principal of the Columbus firm where he worked executed the trades after he had resigned and blamed the troubles on him, telling “the elderly client they were my responsibility,” according to the state report.
Browne declined to speak with reporters at his hotel today after meetings with Bales. An e-mail to his associate Emma Scanlan wasn’t immediately returned.
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