SEC charges local lawyer with role in stock scam

The Securities and Exchange Commission (SEC) on Monday (April 25) charged in federal court that San Diego lawyer Luke Zouvas did the paperwork on a pump 'n' dump stock scam along with a group of Arizonans and an Israeli accountant.

Zouvas was general counsel for Crown Dynamics Corporation, a shell company. Throughout the alleged fraud, Zouvas acted as an escrow agent for purchase of the Crown shell by one of the Arizonans from the Israeli accountant. The Israeli's identity was not disclosed in the registration statement when Crown went public. Zouvas made false statements in the transfer of the shares, says the SEC.

Crown's product was an electronic device to monitor senior citizens and special-needs adults. However, the product required a support staff to take alerts from seniors in trouble. There never was such a staff. Nonetheless, the defendants managed to run up (pump) the stock of Crown so insiders could sell (dump) it. The defendants hired publicists to hype the stock. The stock rose and the insiders dumped.

Zouvas has taken the Fifth Amendment, according to the SEC.