Investor Lawyers Blog
Former Nebraska City brokers Rebecca Engle and Brian Schuster were sent to prison for bilking investors out of more than $20 million — an amount which is, according to the Nebraska Department of Banking and Finance investigation supervisor Thomas Sindelar, the biggest securities fraud case in history of the state. The broker misconduct of Engle and Schuster included more than 130 investors.
Engle and Schuster apparently sold high-risk securities to investors but failed to disclose the risks and warnings associated with the investments. Most of the victims of their broker fraud were retired or nearing retirement age. As such, high-risk investments were unsuitable for them. Engle and Schuster apparently had no private placement investment experience when beginning and could not keep track of where investors’ money was going. Two companies they invested in, LightStream and Sunshine — a utility company and broom making company, respectively — went bankrupt. Schuster and Engle then neglected to tell investors about the bankruptcies.
Reportedly, while Engle wanted to go to authorities about the situation in 2004, Schuster convinced her not to. The pair then went to investors for another $5 to $6 million to keep the investment company afloat.
Before passing sentence on Schuster, District Judge Paul Korslund, said, “This involved irreparable loss, massive loss for many hard-working people. I appreciate that you’re concerned about that, but I don’t think that was the case all along.”
Though Schuster was originally charged with eight felony counts of securities fraud, the charges were amended so that they were not based on intentional acts, but inadvertent omissions, as part of the plea bargain. Schuster pleaded guilty to four counts of securities fraud and will receive 80 months to 18 years in prison. Engle, 56, pleaded guilty to two counts of securities fraud and received 3 to 6 years in prison. Both sentences will begin immediately.
If you believe that you have been the victim of unsuitable investments or improper trading practices, contact the Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.