Bankruptcy filing stays civil suit against former Waco financial adviser accused of defrauding investors of $17 million

Published: May. 13, 2022 at 6:03 PM CDT
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WACO, Texas (KWTX) - A former Waco financial adviser facing claims by his former investment firm employer that he misappropriated more than $17 million from more than 20 customers has filed for Chapter 13 bankruptcy protection.

The emergency bankruptcy filing on Thursday by Robert Turner, a longtime employee of UBS Financial Services in Waco, canceled a hearing Friday at which UBS was set to ask 414th State District Judge Vicki Menard to grant a pre-judgment writ of attachment that would have seized Turner’s assets.

The filing in Waco’s U.S. Bankruptcy Court automatically stays proceedings in the state district court civil lawsuit filed last week by UBS against Turner and his wife, Stephanie Turner, who also is a former UBS financial adviser.

Waco attorney John Montez, who filed the bankruptcy claim on Turner’s behalf, said the federal filing takes precedence over the state civil lawsuit and he expects UBS to transfer its claims to bankruptcy court. Montez’s emergency filing did not include a listing of Turner’s assets and creditors but Montez said he has two weeks to amend his filing.

“Whatever litigation there is going to be will be transferred to federal court,” Montez said.

Turner, 67, worked at UBS 25 years before he and his wife went to work for Stifel, Nicolaus & Co. in October 2021. He has since resigned from Stifel and has lost his professional certification.

The civil lawsuit says that “since learning of Robert Turner’s scheme” UBS has reimbursed at least three customers a total of $5.8 million in an effort to “resolve this matter amicably.”

“UBS estimates the total customer losses may exceed $17 million,” the lawsuit alleges.

Waco attorney David Tekell, who represents Turner in the civil lawsuit, said Turner denies the allegations.

“We didn’t take any money nor do we have any investors’ money, and we are cooperating with the appropriate authorities to assist with the recovery of their funds,” Tekell said Friday.

Houston attorney Paul Flack, who represents UBS in the civil lawsuit, declined comment and referred questions about the case to UBS officials, who did not return messages on Friday.

Turner, who has been questioned by the FBI about the transactions, declined comment earlier this week on the fraud allegations in the lawsuit. While the civil lawsuit also names Stephanie Turner  as a defendant it alleges no impropriety on her part. She is named because she is Turnery’s wife and the litigation sought to seize the couple’s community property assets.

Stephanie Turner did not join her husband in the emergency bankruptcy filing, according to preliminary court filings.

The civil lawsuit alleges Turner solicited at least 23 UBS customers to buy “purported investments” issued by Fairfax Financial Corporation, which the lawsuit says were not UBS products and UBS did not know he was selling.

“The investments were a sham,” the suit alleges. “UBS has learned that there were no assets backing the ‘investments.’ It was just a scheme that Robert Turner and his college buddy, Mark Woodward, cooked up.”

Woodward, 68, who lived in New Braunfels, took his own life Dec. 20, three days after he was contacted by FBI agents about the allegations. The lawsuit identifies him as managing trustee of Fairfax.

Turner, the lawsuit claims, provided his clients fraudulent account statements that he and/or Woodward created. Turner gave the customers “portfolio summaries” that he generated without the approval or review of UBS, instead of giving them official UBS statements and reports, according to the lawsuit.

Attached to the lawsuit are affidavits from three of Turner’s customers, who allege they invested $333,741, $246,500 and $1.3 million, respectively, and “received nothing of value in return for the transactions.”

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