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INSURANCE SALESMAN GETS TWO YEARS IN PRISON FOR BILKING ELDERLY CLIENTS OUT OF OVER $1 MILLION
June 24, 2002
JUNE 24, 2002
CONTACT: Christine Bruenn, State Securities Administrator 207-624-8551
Carlos Diaz, Assistant Attorney General 207-822-0260 Maine Superior Court Justice Ellen Gorman today sentenced Richard H. Walls, 58, formerly of Waterville, Maine and now of Lubbock, Texas, to seven years in prison with all but two years suspended on felony securities convictions. Walls will be on probation for eight years after his release and will pay $1,012,241 in restitution to his victims.
A Franklin County jury found Walls guilty on June 12, 2002, after a week-long trial. Walls was convicted of using fraud and deception in the sale of securities, selling unregistered securities, selling securities without a license, and violating an order of the Maine Securities Administrator that he not associate with any issuers of securities. Each conviction carried a maximum five-year sentence.
The evidence presented in court by Assistant Attorney General Carlos Diaz showed that Walls sold investments in four Florida start-up companies to more than two-dozen Maine residents, most of whom were elderly. The investors testified that Walls, their long-time trusted insurance salesman, failed to disclose the risky nature of the investments. Walls also failed to disclose that the securities were not registered with the Maine Office of Securities and that he was not licensed to sell them in Maine.
Before imposing sentence, Justice Gorman stated, "If anyone knew or should have known that these were not the investments to offer to long-time elderly clients, it was Mr. Walls."
Many of the victims invested their life savings. Although the victims initially received dividends on the investments, the payments soon stopped. None of the victims has been able to recover their investment. The victims' losses exceed $1 million.
Walls was prosecuted under the Maine securities laws. "The securities laws are designed to protect individuals, like the victims here, who do not have the resources to guard against fraudulent and speculative investments," Diaz said.
Attorney General Steven Rowe noted that sellers of fraudulent investments frequently target the elderly. "If the promised rate of return on an investment seems too good to be true, it probably is not true," said Rowe.
According to Christine A. Bruenn, Securities Administrator for the State, securities must be registered with the State, and sellers of securities must be licensed. Bruenn recommends that Maine residents check out potential investments with her office by calling, toll-free, 1-877-624-8551. Residents also should use the toll-free number for questions or complaints about anyone selling investments.