Mitchell J. Stein, Multimillion-Dollar Stock Fraud, Florida 2013

Multimillion-Dollar Stock Fraud Scheme Exposed in Florida

A convicted Florida attorney has been found guilty in a five-year, multimillion-dollar market manipulation and fraud scheme. Mitchell J. Stein, 53, of Hidden Hills, Calif., was convicted by a jury in the Southern District of Florida for his role in operating the scheme.

The scheme, which spanned from 2007 to 2012, involved Stein artificially inflating the price of Signalife Inc. stock by creating false impressions of sales activity. Stein caused Signalife to issue press releases and file documents with the U.S. Securities and Exchange Commission (SEC) trumpeting fictitious sales. He also arranged for Signalife products to be shipped to and temporarily stored with an individual who had not purchased any products.

Stein used blind trusts to disguise his selling of stock during the conspiracy and had a co-conspirator sell shares of Signalife stock after he caused false information to be disseminated to the public. He also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein. From one co-conspirator alone, Stein received illicit gains of over $1.8 million.

Stein was charged in a December 2011 indictment and on May 20, 2013, he was convicted on all counts: conspiracy to commit mail and wire fraud and three counts each of mail fraud and wire fraud, each carrying a maximum penalty of 20 years in prison; three counts of securities fraud, each carrying a maximum penalty of 25 years; three counts of money laundering, each carrying a maximum penalty of 10 years; and one count of conspiracy to obstruct justice, carrying a maximum penalty of five years in prison.

Stein is being detained until sentencing, which is scheduled for August 16, 2013. He faces the possibility of serving 20 years in prison for each count of mail and wire fraud, 25 years for each count of securities fraud, 10 years for each count of money laundering, and five years for conspiracy to obstruct justice.

The case was investigated by the U.S. Postal Inspection Service and the Office of the Special Inspector General for the Troubled Asset Relief Program. The Securities and Exchange Commission (SEC) conducted a parallel investigation and filed a civil enforcement action against Stein and others in December 2011.

Source: https://www.justice.gov/archives/opa/pr/attorney-convicted-multimillion-dollar-stock-fraud