THOUSAND OAKS : Surgeon Convicted in Stock Fraud Case

A Thousand Oaks plastic surgeon has been convicted of conspiracy and securities and wire fraud in connection with his role in the manipulation of the stock of Magna Technologies Inc., a defunct Thousand Oaks corporation, the U.S. attorney’s office said.

Robert Gutstein, 53, was found guilty after a four-week trial in federal court of conspiring with other defendants to manipulate the market price of Magna, said John F. Walsh, an assistant U.S. attorney.

According to the federal indictment, the stock price rose from its March, 1985, starting level of 50 cents a share to a September, 1985, peak of $9.50 a share. The stock price essentially collapsed soon after, Walsh said.

Gutstein was also convicted of two counts of wire fraud in connection with several misleading and false conversations he had with a Texas brokerage house, Eppler, Guerin & Turner, a victim in the case.

The jury acquitted Gutstein of 13 additional charges relating to fraudulent transactions and telephone communications conducted by his alleged co-conspirators, Jacob Rubenstein, 46, formerly of Woodland Hills and presently a fugitive; Herbert Stone, 63, of New York, and Robert Victor, 53, of Nevada.

Stone has pleaded guilty to 12 counts of securities and wire fraud.

Victor has pleaded guilty to four counts of securities and tax fraud. Both men are scheduled to be sentenced this summer.

Walsh said evidence at Gutstein’s trial showed that Magna was a shell corporation with few assets, no business income and substantial debts.

The defendants used the corporation as a vehicle for manipulating the penny stock and reaping the benefits of an artificially high stock price, Walsh said.

Gutstein is scheduled to be sentenced Aug. 12 in federal court.

He faces a maximum sentence of 25 years in prison, in addition to several million dollars in possible fines and restitution.