A 17-year veteran Austin police officer was arrested Saturday and charged with aggravated assault after his colleagues said that while he was off duty Friday night, he threatened a man with a revolver during a disagreement about money invested in speculative stocks.
Officer Robert Jackson, 48, remained at the Travis County Jail on Saturday night. His bail was set at $50,000.
Jackson will be placed on restricted duty at home, with pay, pending the outcome of the criminal and Internal Affairs investigations, police said.
The second-degree felony carries a fine of up to $10,000 and up to 20 years in jail. The case will be presented to a grand jury by the Travis County district attorney’s office.
About 8:40 p.m. Friday, Jackson confronted Edward Karaback, 62, inside Karaback’s apartment at 3816 S. Lamar Blvd., Assistant Police Chief Cathy Ellison said. Jackson believed Karaback owed him money from stock investments, according to police spokeswoman Laura Albrecht.
Ellison said Jackson was investing in “penny stocks” with Karaback. The term refers to small-market-value stocks that trade for less than $5 a share. These stocks are often traded on the lightly regulated over-the-counter market and are much more volatile than large- company stocks.
The stock investments â€” at least $25,000 worth â€” apparently sparked the incident Friday night. Karaback said Jackson loaned the money to him for investments.
Jackson pointed a revolver in Karaback’s direction, Ellison said.
Karaback “felt threatened,” she said. “He felt he was going to be shot.”
Late Saturday, Karaback gave this account of the incident:
He said he opened his apartment door, and Jackson emerged from behind a mutual friend who had accompanied Jackson. Neither Karaback nor the police would identify the friend.
Karaback said Jackson came through the door and pulled a gun out of the right side of his sweatshirt pocket. Jackson pointed the gun toward the ceiling, and bullets spilled from the weapon, Karaback said.
“I can’t use those; those are Austin police issued,” Karaback recalled Jackson saying. Then, according to Karaback, Jackson said, “but I can use this one,” and pulled one bullet from his left sweatshirt pocket.
“Have you ever played Russian roulette?” Karaback said Jackson asked as he spun the cylinder.
Karaback said their mutual friend intervened and persuaded Jackson to leave. Karaback, who filed for personal bankruptcy Jan. 10, said he gave a copy of his court filing to the friend.
The friend then picked up the bullets Jackson had spilled on the floor and started to leave the apartment. When he opened the door, Jackson re-entered and demanded repayment of his loan.
Karaback said Jackson said he wanted money by the end of the month and a total of $35,000 by the end of the year.
Karaback said he told Jackson, “That’s basically impossible; I have no money.”
Jackson then said, “I don’t care how you get it,” according to Karaback.
Minutes later, Karaback said, the two men left.
Karaback once ran an illegal investment service called Penny Stock Management Program in Austin, according to the Texas State Securities Board. The board issued a cease-and-desist order on April 27, 2004, against Karaback, who consented to the order.
According to the order, Karaback managed funds for investors by purchasing penny stocks and offered to split any profits equally. Because Karaback wasn’t a registered securities dealer, the board ruled that his scheme violated state law.
Karaback said he is currently a contract driver with Noble Logistic Services Inc. in Austin. Karaback said he and Jackson met in 2001 through the mutual friend.
Jackson invested with Karaback from 2001 to 2003, Ellison said. From 2003 to 2005, Jackson was getting a return on his investments.
Jackson “does have some discipline history,” Ellison said, but she declined to elaborate Saturday.
The previous incidents were “nothing of this magnitude,” she said.
“It’s unfortunate. It’s disappointing,” she said. “We’re here to protect folks, not cause harm.”