Posted Dec 21, 2011 12:12 am CST
A California-licensed lawyer known for his efforts to combat mortgage fraud has been indicted and arrested in a federal securities-fraud case in Florida.
Mitchell J. Stein, who has a home in Boca Raton, Fla., and whose California law firm has an office there, is facing charges including mail and wire fraud, money laundering and conspiracy to obstruct justice, reports the South Florida Business Journal.
He is accused of masterminding a scheme to artificially inflate the value of shares in a California-based company, Heart Tronics, which markets a heart-monitoring device. It was formally known as Signalife.
It accuses Stein, the company’s outside counsel, of misrepresenting its financial situation while controlling it as a de facto officer. His wife allegedly holds a majority stockholder position in Heart Tronics.
The company has a former professional football player and Olympic sprinter, Willie Gault, as its co-chief. However, the lawsuit alleges he served as a figurehead leader and was in fact controlled by Stein.
Gault, who was also sued by the SEC, along with other defendants, but not charged criminally, denies wrongdoing, his lawyer told Bloomberg.
The news agency could not reach Stein for comment.