BULLETIN: First, Notre Dame’s ‘Rudy’ — Now, Willie Gault Of The ‘Super Bowl Shuffle’ Chicago Bears; SEC Charges Former NFL Wide Receiver In Alleged Stock Caper; Feds Arrest Lawyer

BULLETIN: The SEC has gone to federal court in the Central District of California to charge former U.S. Olympian and NFL wide receiver Willie Gault in an alleged stock scheme involving Heart Tronics Inc.

Gault, 51, was a member of the 1980 U.S. Olympic Team that boycotted the summer games in Moscow. He later played in the NFL for 11 seasons for the Chicago Bears and the then-Los Angeles Raiders. With Gault playing wide receiver, the 1985 Bears team won the Super Bowl over the New England Patriots. The Bears’ team also was famous for the “Super Bowl Shuffle” video and recording.

Just last week, the SEC charged former Notre Dame walk-on Daniel “Rudy” Ruettiger  and 12 others in an alleged penny-stock caper. Ruettiger, 63, was the inspiration behind the 1993 movie “Rudy.” The agency said today that the separate scheme involving Gault also involved others, including J. Rowland Perkins, a founder of the Creative Artists Agency talent agency, and Mitchell J. Stein, an attorney in Hidden Valley, Calif., and Boca Raton, Fla.

Perkins and Gault were charged civilly. Stein, 53, was charged both civilly and criminally.

Stein was arrested Sunday at Los Angeles International Airport, the Justice Department said this afternoon. He is charged with one count of conspiracy to commit mail fraud and wire fraud, three counts of mail fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering and one count of conspiracy to obstruct justice.

“Stein took advantage of Gault’s celebrity to further prop up the image of Heart Tronics as a successful enterprise,” said Stephen L. Cohen, associate director in the SEC’s Division of Enforcement. “Stein secretly sold millions of dollars in stock while peddling false claims of Heart Tronics’s lucrative sales orders, and has been living the high life off his illicit proceeds with multiple homes, exotic cars, and private jets.”

Also charged civilly was Martin B. Carter of Boca Raton. The SEC described him as Stein’s “chauffer and handyman.” Other civil defendants include Ryan A. Rauch of San Clemente, Calif., and Mark C. Nevdahl of Spokane, Wash.

“Stein and Gault together defrauded one investor into making a substantial investment in Heart Tronics based on false representations that his money would fund the company’s operations,” the SEC alleged. “Instead, Stein and Gault diverted the investor’s proceeds for personal use, including the purchase of Heart Tronics stock in Gault’s personal brokerage account ‘Catch 83’ to create the false appearance of volume and investor demand for the stock.”

Gault wore No. 83 for the Bears and the Raiders. The SEC said Heart Tronics installed him “as a figurehead co-CEO along with . . .  Perkins in order to generate publicity for the company and foster investor confidence.”

“Stein orchestrated the repeated announcement of fictitious sales orders for Heart Tronics’ products in public filings with the Commission, press releases, and other public broadcasts, all designed to make it appear that Heart Tronics was more successful than it actually was,” the SEC charged.

As part of the fraud, the SEC charged, Carter flew to Japan to mail back a letter to the United States in a bid to advance the scheme.

Carter, the chauffer, also posed as a person named “Tony Nony,” the SEC charged.

Read the SEC complaint.

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