Newport Beach Man Indicted in $10-Million Scam

A Newport Beach man was indicted on charges of swindling 400 victims out of more than $10 million by persuading them to invest in three supposedly high-tech companies he controlled, the U.S. attorney’s office said Friday.

Steven P. Hevell, 38, taken into custody Wednesday night, was ordered held without bond as a flight risk following a hearing before a federal magistrate judge Thursday.

Hevell’s criminal history, dating to a 1982 stolen-property conviction, includes repeated cases of violence or threats against women, according to a search-warrant affidavit filed by Tustin police in 1998. He was released from prison in June after serving a two-year sentence in one of those cases, Tustin Sgt. Thomas R. Tarpley said.

In the new federal case, Hevell is scheduled to be arraigned April 30 on a 25-count indictment accusing him of 12 counts of mail fraud and 13 counts of money laundering, said Assistant U.S. Atty. David A. Hoffer.

Neither Hevell’s court-appointed attorney, Diana Cavanaugh, nor his previous lawyer returned telephone calls for comment.

According to the indictment, investors nationwide were solicited between 1994 and 1998 for Hevell’s MicroWest Industries Inc., Advanced Identification Technology Inc., and Consolidated Imaging Centers Radiology Network Inc.

The companies purportedly acquired and sold computer components and supposedly developed a system to transmit fingerprints electronically.

But the indictment alleges that no such high-tech operation or fingerprint system existed.

Investors’ money, instead, went to pay telemarketers who promoted the scheme and to pay interest at 14% and 17.5% to earlier investors, according to the indictment. Hevell also issued stock, promising investors his operations would soon go public--another misrepresentation, according to the indictment.

“There were no revenues in any of these businesses. It appears to have been a telemarketing scam--a Ponzi scheme,” using new investments to pay off earlier investors, Hoffer said.

Hevell previously settled two fraud lawsuits filed by the Securities and Exchange Commission. One in 1997 related to the MicroWest case and the other, in 1998, to raising $1.1 million for the purchase of an Internet access firm. The online firm was never purchased and most of the funds went to sales agents and some for Hevell’s hobby of go-cart racing, the SEC said.

The agency seized $110,000 of Hevell’s assets and returned it to investors, said Gregory Glynn, a senior trial counsel for the SEC.

In settling the SEC cases, Hevell agreed to repay an additional $55,000, and the SEC won a $2.8-million judgment against MicroWest. But Glynn said the agency has recovered none of those amounts.

“He hasn’t paid a dime,” Glynn said.

Hevell’s two-year prison sentence stems from a 1998 arrest on charges of stalking, cocaine possession and making terrorist threats against a former girlfriend. Sgt. Tarpley, who investigated the case, said Hevell pleaded guilty.

Detectives in Florida are continuing their investigation of that case, but no further charges have been filed, Tarpley said.