Texas man charged with defrauding Mainers out of $750,000

AUGUSTA – A Texas man facing criminal charges of selling securities without a license has been named in two civil lawsuits seeking the return of about $750,000 lost by clients who gave him money to invest.

An elderly Litchfield couple, Merle and Norma Lancaster, sued Richard Walls in Kennebec County Superior Court, seeking almost $700,000.

Another suit was filed last spring in Franklin County Superior Court by Rebecca J. Ellis, a widow from Strong who wants Walls to return $52,000 she invested with him after her husband died.

Walls of Lubbock, Texas, pleaded innocent last week in Farmington to charges of selling fraudulent bank notes, securities and investment contracts in Franklin, Kennebec and Oxford counties without a broker’s license between April 1996 and March 1998.

Justice Nancy Mills set bail for Walls at $5,000 cash. Walls has gone back to Texas and will return to Maine for trial, Assistant Attorney General Carlos Diaz said.

The indictment alleges Walls offered to sell bank notes and investment contracts of Pavlik Chiropractic Group, Caribbean Pacific International Inc., Seminole Bakeries and Access HealthMax by telling clients “the investments were better than certificates of deposit and life insurance policies” and would produce an annual return of 10 percent to 12 percent.

Walls was licensed in the state in 1991 but later was stripped of his securities license, Diaz said.

Attorney Sumner Lipman, who represents the Lancasters, said Walls went beyond the role of financial adviser to the couple.

“He had them sign wills, powers of attorney, living trusts,” Lipman said. “They turned over all of their assets to him with agreement he would pay their bills for them.”

Lipman said other people have lost money by investing with Walls, whom they met through a church organization. Diaz said the investments ran into the millions of dollars.

“This is a case where a lot of elderly people spent their life savings and didn’t protect themselves by checking,” the prosecutor said.

Diaz said their chances of recovering their money are slim.

“Most of the time restitution isn’t forthcoming,” he said, “And jail time doesn’t help the victims.”