Ex-Executive Gets 30-Month Term : Magna Technologies: The judge calls Robert Victor a ‘duper’ for his role in manipulating his company’s stock.
A 30-month sentence given to Robert Victor, a former executive of Magna Technologies Inc., brings to two the number of principals in the defunct Thousand Oaks company who have received prison terms for their roles in a stock manipulation case.
Victor, 53, of Las Vegas, pleaded guilty in March to four counts of securities and tax fraud in connection with the rise and fall of Magna Technologies stock in 1985. In pronouncing sentence in Los Angeles last week, U.S. District Court Judge Terry J. Hatter Jr. called Victor a “duper” and ordered him to pay $20,000 in fines.
“We thought that it was a very fair sentence,” said Assistant U.S. Atty. John F. Walsh, who prosecuted the case.
Victor, who was a Magna Technologies shareholder and a principal promoter of the company’s stock, is a previously convicted felon who changed his name from Robert Viggiano. Victor was referred to in police reports from the investigation of ZZZZ Best--the Reseda carpet cleaning company that folded in 1987 after widespread fraud--as a “reputed member of the Colombo organized crime family.”
During the securities fraud trial of Barry Minkow, ZZZZ Best’s founder, Minkow’s attorney said Victor, a ZZZZ Best shareholder, used threats and violence to force Minkow into the fraud.
However, Victor was never charged with a crime relating to ZZZZ Best. Minkow was convicted in 1988 of 57 counts of fraud.
Victor’s sentencing in the Magna Technologies case followed the sentencing in June of Herbert Stone, a former New York stockbroker who pleaded guilty in August, 1990, to 12 counts of conspiracy and securities and wire fraud in connection with Magna Technologies. Stone, 63, also received a 30-month sentence.
A third former principal of Magna Technologies, Robert Gutstein, an Agoura Hills plastic surgeon who was Magna’s chairman, is scheduled to be sentenced Sept. 30. Gutstein was convicted by a federal jury in June of conspiracy and securities and wire fraud. He faces a maximum penalty of 25 years in prison.
A fourth figure in the Magna Technologies case, Jacob Rubenstein, remains at large. Walsh said the whereabouts of Rubenstein, 46, a former Magna Technologies shareholder and the alleged ringleader of the stock manipulation scheme, have been unknown since the federal indictment was unsealed by a grand jury early last year.
According to the indictment, Magna Technologies was a shell corporation with no assets that was used by Victor and the others to profit by manipulating its stock. The company once claimed to have plans to market such unusual products as a 45,000-volt “stun gun,” an “insta-cup” to make instant soup, a device to help sexually impotent men and a hand-held, battery-powered pain reliever.
But federal prosecutors said Magna Technologies produced no products, and alleged that Victor and the others used fraudulent means to manipulate the company’s stock, including inducing friends and relatives to set up accounts to trade Magna shares to create the impression of interest in the stock. However, Victor and the others actually controlled the accounts, prosecutors alleged.
Magna’s stock rose from 50 cents a share in March, 1985, to a peak of $9.50 in September, 1985. Walsh said Victor made more than $90,000 in profits from sales of Magna Technologies stock before the stock collapsed and became worthless.
