OMAHA, Neb. (AP) _ The former Nebraska City broker who is accused of improperly selling risky investments in several interrelated Florida companies has filed bankruptcy in Arizona.
The lawyers handling most of the claims against Rebecca Engle say the Chapter 11 bankruptcy filing will delay the lawsuits and arbitration claims she faces. But it won't allow Engle to avoid paying investors if their lawyers can prove she committed securities fraud.
"I think this is just another tactic to delay the inevitable by Ms. Engle," lawyer Dave Gaba said.
More than 130 investors are pursuing claims against Engle that accuse her and officials at the Florida companies of defrauding investors of more than $20 million. One investor, Bernice Bonebrake, already won $80,000 damages and nearly $38,000 in legal fees in an arbitration order earlier this month.
At least three lawsuits have been filed in state and federal courts against Engle, her former employers and several brokers who worked with her. The lawsuits are still in the early stages.
And several of the upset investors are barred from suing, so they are seeking damages in arbitration through the Financial Industry Regulatory Authority.
Most of the upset investors were nearing retirement age or were already retired when they got involved with Engle, so they wanted conservative, stable investments with little risk. They say Engle instead invested their money in high-risk enterprises and never fully explained the risks.
Engle's bankruptcy attorney, Albert Hartwell, said he did not have Engle's permission to discuss her case. One of Engle's other attorneys, who represents her in the federal lawsuit, did not immediately respond to a message left Monday.
In the bankruptcy filing, Engle said she has assets worth between $500,000 and $1 million, but estimated that she owes between $10 million and $50 million.
Several of Engle's biggest outstanding debts are related to the investment businesses she used to run in Nebraska City. She owes $150,000 to VSR Financial Services Inc., which was one of the investment companies she worked for. She also owes $101,568 on two business credit cards.
Engle faces a $210,000 lawsuit judgment that a Florida judge ordered. The bankruptcy filing did not include details of the Florida lawsuit.
Engle is the broker at the center of the lawsuits, but several other brokers worked with her at some point between 2000 and 2007. The other brokers are former Nebraska football player Brian Schuster, Peter Lahti and Paula Turner.
The brokers were affiliated with at least three different companies — Capital Growth Financial LLC, Wachovia Securities LLC and VSR Financial Services Inc. — during those years.
Engle and Schuster, sold securities in American Capital Corp. and Royal Palm. Those two Florida companies have both been bought by PrimEdge Inc., and Schuster became the president and chief executive of PrimEdge.
