Ex-Magna Shareholder Pleads Guilty in Fraud
A key figure in a criminal indictment pleaded guilty last week in U.S. District Court in Los Angeles to four counts of securities and tax fraud for his role in the manipulation of the stock of Magna Technologies Inc., a defunct Thousand Oaks company.
Robert Victor, 53, a former Magna shareholder who was also linked to ZZZZ Best, the Reseda carpet-cleaning company run by Barry Minkow that folded in 1987 after widespread fraud, was one of four men charged in the Magna stock manipulation scheme and the second to plead guilty to federal charges.
According to the indictment, Magna was a shell corporation with few assets, no income and substantial debts. But Victor, along with Jacob Rubenstein, Magna’s principal promoter and stockholder; Robert Gutstein, Magna’s chairman, and Herbert Stone, a New York stockbroker, used a variety of illegal methods to inflate Magna’s stock. The stock rose from 50 cents a share in March, 1985, to $9.50 a share in September, 1985, and then collapsed after the defendants reaped more than $1 million in profits, the indictment said.
Stone pleaded guilty in August to 12 counts of securities and wire fraud. Victor, who was never charged with a crime in connection with ZZZZ Best, faces up to 18 years in prison, $40,000 in fines and tens of thousands of dollars in restitution in connection with Magna. Victor will be sentenced in July.
