Ex-Broker Indicted in Partnership Sales : Securities: Authorities say Prudential Securities misrepresented the investments. Buyers may have lost more than $1 billion.

A former Prudential Securities broker was indicted Wednesday on felony charges in connection with the sale of limited partnership interests that may have cost investors more than $1 billion.

The Dallas indictment, apparently the first criminal case arising from the Prudential partnerships, may be the start of further legal trouble for the firm. The case is unusual because criminal charges are rarely brought against a broker for misrepresenting the risks of securities.

Prudential, which heavily promoted the partnerships for individual investors nationwide in the 1980s, already faces civil charges filed by regulators in at least two states, as well as numerous lawsuits and arbitration claims resulting from sales of the partnership interests. Many are now worthless, and lawyers say losses to thousands of investors total well over $1 billion.

R. Park Downer, a special investigator for the Dallas district attorney’s office, said the indictment of broker Jeffrey A. Schiller “is not the end.”

He said the indictment is the first official action to result from a continuing investigation into Prudential’s role in promoting certain partnerships.

Prudential, formerly Prudential-Bache Securities, is a unit of Prudential Insurance Co.

The indictment charges Schiller with fraud and violation of Texas securities laws in connection with a series of limited partnership interests known as “Prudential-Bache Energy Growth Fund No. 3.”

The grand jury charged that Schiller intentionally misrepresented the oil and gas limited partnerships by falsely telling customers that they were guaranteed to return three to four times the money invested, that the securities were “absolutely safe” and that the interests were easily transferable and liquid.

The securities allegedly were almost impossible for customers to resell, and are now alleged to be worthless.

Schiller, who formerly worked in Prudential’s office in Dallas, left the firm in February. He now works for the brokerage firm Rauscher Pierce Refsnes Inc. He could not be reached for comment.

William Ahearn, a Prudential Securities spokesman, said the firm was not aware of the indictment and had no immediate comment.

In recent months, a number of former Prudential customers across the country have obtained big awards in arbitration cases after contending that Prudential defrauded them by falsely minimizing the risks of limited partnership interests.

In April, for example, a National Assn. of Securities Dealers arbitration panel ordered Prudential to pay $982,247 to three Oklahoma investors who bought partnership interests. State regulators in Florida and Kansas have civil charges pending against the firm relating to the partnership promotions.

The firm has denied wrongdoing.

Internal sales material obtained by The Times shows that Prudential seemed to encourage its brokers to minimize the risks of the investments. Material from 1987 distributed to brokers urges them to “stress safety and guarantees,” “avoid getting bogged down in facts” and give “personal assurances” of the financial safety.

Ahearn said Wednesday that the firm stands by the sales material, which he described as “general and rather generic sales techniques.”

Downer said Schiller, if convicted, faces up to 20 years in prison and a $5,000 fine.