The Associated Press

DAYTON, Ohio - An Army reservist lost his business while on his second tour of duty since the Sept. 11 attacks, and his family only kept their home when the federal government forgave loans and back taxes.

Seven months before the terrorists attacked, Ted Valentini acquired a business making molds for plastics and electronics, and became its chief of sales and marketing.

Business sagged at Tramco Mold Inc., in Beavercreek 10 miles south of Dayton, when the captain was called up to serve in the National Guard's emergency center in Washington, D.C.

Tramco revived briefly in 2002 when he returned for seven months, but failed after he was sent to Iraq last January. Its assets were sold in April.

"The best-case scenario is Ted comes home, we've lost our savings ... and he's unemployed," his wife, Penny, told The Dayton Daily News for a story Sunday.

"So 15 years of trying to build up ourselves financially, prepare for retirement and to save money for our kids' college, it's gone. It's gone. We have to start over."

Penny Valentini said she and her husband don't question his military duty or the length of service. For security reasons, he declined to be interviewed while working in psychological operations in Iraq.

But Penny Valentini said she worries about other troops in similar situations.

"The system is heartless only because it's never had to deal with this situation before, because it's never used the military reserves in this way before," she said.

"These guys are going to start coming home in the spring and the summer and then a whole new crop is going to go, and if you're self-employed you are at much greater financial risk than people who work for large companies," she said.

There are a record 164,244 reservists on active duty, and it's unknown how many are small business owners or self-employed.

"There are many cases like this," said Lani Burnett of the Reserve Enlisted Association. "There are so many different horror stories."

Ted Valentini had borrowed $91,600 through the Small Business Administration for his first tour of duty, backing the loan with the family's home outside Centerville. The SBA also had backed the company's $250,000 mortgage through Key Bank.

Also, the closed business owed $18,000 in back taxes for employees.

The family was lucky because a good friend, Brad Chalker, is an attorney. The debts were forgiven after Chalker said he talked to countless government officials.

"I kept telling them: 'The Valentinis have no money. All you can do by continuing to pursue them is to force them into personal bankruptcy, so why do it?' " Chalker said.

Ted Valentini, 38, is expected home in June after 18 months on active duty.