3 Indicted by Federal Grand Jury in Check-Kiting Scheme

Two former executives of Encino-based Stan Lee Media, which produces animated comic book stories for the Internet, were indicted Thursday along with a former Merrill Lynch financial consultant in an alleged check-kiting scheme.

Co-founder Peter F. Paul, 52, of Calabasas and former Executive Vice President Stephen M. Gordon, 50, of Sherman Oaks are accused of depositing millions of dollars worth of bad checks into accounts at US Bank and Merrill Lynch.

According to the 36-count indictment handed down by a federal grand jury in Los Angeles, the executives were able to carry out the scheme because of assistance from Gordon’s brother, Jonathan, 43, of Malibu, a financial consultant at Merrill Lynch’s Century City offices.

Jonathan Gordon was charged in the indictment with accepting about $325,000 in cash for his help.

“We are looking forward to addressing these charges in court,” said his attorney, Mark Beck.

Harland Braun, who represents Stephen Gordon, said his client was simply following directives given to him by Paul. “He had no idea what was going on,” Braun said.

Paul’s lawyer, Larry Klayman of Washington, D.C., could not be reached for comment.

Stan Lee, the legendary creator of such characters as Spider Man and the X-Men, founded Stan Lee Media with Paul. Lee was not charged with any wrongdoing.

According to the indictment, Paul and Stephen Gordon needed $2 million to repay part of $5 million in loans they obtained from Merrill Lynch. To get the money, the indictment said, Stephen Gordon and Paul wrote a series of bad checks drawn against Stan Lee Media’s accounts. The checks were deposited at the US Bank branch in Encino, which, in turn, issued cashier’s checks to companies controlled by Paul and Stephen Gordon, according to the indictment. Authorities said Jonathan Gordon intervened on their behalf with bank officials to approve the transactions. US Bank allegedly lost $1.3 million.

At the same time, the indictment said, Merrill Lynch wound up losing $1 million from an alleged check-kiting scheme by Paul and Stephen Gordon to make it appear as if they were paying down their debt.