Comic Book Site’s Co-Founder Indicted

The co-founder of Encino-based Stan Lee Media, which produces online animated comic book stories, was indicted Tuesday with three others on charges they manipulated company stock and bilked investors out of $25 million.

Authorities say the co-founder, Peter Paul, 52, has fled to Brazil. Federal prosecutors are planning to seek his extradition.

Stan Lee, the legendary creator of such characters as Spider-Man and the X-Men while employed by Marvel Comics, was not charged. A Stan Lee Media spokesman did not a return a call seeking comment late Tuesday.

Paul’s attorney, Larry Klayman, told reporters Tuesday that Paul contributed more than $2 million of the proceeds to Hillary Rodham Clinton’s U.S. Senate campaign by helping to finance a Hollywood tribute to former President Bill Clinton during last summer’s Democratic National Convention.

Hillary Clinton’s campaign said in August it returned a $2,000 contribution from Paul.

Tuesday, a spokeswoman for the New York senator declined to comment on the indictment. Klayman is affiliated with the political organization Judicial Watch, which has filed a series of lawsuits against the former Clinton administration.

“We tend not to comment on Judicial Watch press releases,” said Karen Dunn, a spokeswoman for Sen. Clinton.

In addition to Paul, the indictment released Tuesday also named Stephen M. Gordon, 50, a former Stan Lee Media executive vice president; Charles Kusche, 47, a stock promoter from Darien, Conn.; and Jeffrey Pittsburg, 57, a Wall Street stock analyst, as participants in an alleged conspiracy to commit securities fraud.

Gordon and Kusche were arrested Tuesday, authorities said. Pittsburg was arrested previously.

The defendants face maximum sentences of 15 years in prison if convicted.

According to the indictment, the defendants used various methods to inflate the price of Stan Lee Media stock. Paul and Gordon allegedly hired Pittsburg to trumpet the shares to investors with bogus reports.

The indictment said Paul and Gordon, aware that dumping their shares at once would cause the price to slip, borrowed large sums of money from Merrill Lynch through nominee accounts. They used Stan Lee stock as collateral, which allowed them to sell their stock to Merrill Lynch without lowering its market price, authorities said.

Later, the pair made undisclosed payments to Pittsburg and Kusche, who purchased and arranged for others to buy their stock, according to the indictment. In November, the indictment says, Paul and Gordon stopped making payments, causing Stan Lee Media’s stock price to drop. That left investors with worthless stock and Merrill Lynch with no collateral.

After hitting a high last year of more than $23, Stan Lee Media’s price slid to less than $1 per share by Dec. 13. Stan Lee Chief Executive Ken Williams said the company later suspended Paul and Gordon “for cause” and has been cooperating with inquiries by the Securities and Exchange Commission.

The company has laid off the bulk of its 165 employees, and in February it filed for Chapter 11 bankruptcy protection.

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Times wire services were used in compiling this report.