People leave the SEC headquarters in Washington, D.C., May 12, 2021.
Andrew Kelly | Reuters
An attorney for a Minnesota man criminally charged with kidnapping several dormant mailbox companies in a pump-and-dump stock program abruptly withdrew Wednesday from a civil lawsuit seeking control of another inactive Florida-based company.
Lawyer David Rothstein’s lawsuit came two days later at a court hearing in Florida CNBC announced that its client, Mark Miller, recently moved take control of the company, New World Gold Corp.which resembled Miller’s alleged illegal tactic that seized up to seven other inactive mailbox companies between 2017 and 2019.
New World Gold is reportedly in the mining business. Miller was named director of the company at a shareholders’ meeting in May after filing a lawsuit asking a judge to order that meeting.
“Here’s a curveball, Your Honor,” Rothstein told Palm Beach County Court Justice G. Joseph Curley during a Zoom hearing on a motion related to New World Gold.
Because of “recent developments,” said Rothstein, “my company intends to withdraw. It only came to a head yesterday.”
Rothstein said his withdrawal request was spurred on by “irreconcilable differences not related to money.”
“Saying more than that would put me in a compromising position,” the attorney told Curley.
“A more pressing concern for myself, selfish, and for my law firm is to try to get out of this matter.”
Curley granted the attorney’s motion to resign.
Miller, who lives in Breezy Point, Minnesota and owns a construction company, was not involved in Zoom’s trial.
A man who answered Miller’s cell phone Wednesday morning said he wasn’t Miller and then hung up when a CNBC reporter called for comment.
His Minnesota criminal defense attorney declined to comment.
Miller was charged with two other men in federal court in Minnesota last week. He was sued separately in the same court by the Securities and Exchange Commission.
The indictment against Miller alleges that he and two co-defendants used fake resignation letters from company officials to take control of four inactive mailbox companies with publicly traded stocks.
They then allegedly made false or misleading statements via press releases and social media, as well as the SEC’s own public filing system, EDGAR, alleging that the companies were alleged to have attractive new business opportunities.
Miller and his alleged co-conspirators are charged with buying up millions of shares in these companies, often for less than a dime, and then selling those shares after making fraudulent claims about their share price soaring.
In its civil lawsuit, the SEC identified three other penny stock companies that are believed to be also similarly targeted by Miller: Bebida beverage company, Simulated environment concepts and Strategic asset leasing.
Rothstein was in court Wednesday on a legal motion Miller filed just the day before CNBC announced that he had been charged with fraud against the mailbox company.
In February Miller, with Rothstein as attorney, sued New World Gold, a long-standing inactive Boca Raton-based company.
The company has not filed annual filings with the Florida Secretary of State since 2015, the Division of Corporations database shows. According to the database, the company was only discontinued on June 4th.
Miller, as a shareholder in New World Gold, “seeks orders from this court to hold an annual general meeting for Mr. Miller to discuss the status of the company’s business,” the lawsuit states.
After the judge granted that motion, the shareholders’ meeting was held on May 27, and, according to Rothstein, around 100 shareholders unanimously voted for their 450 million shares to elect Miller as director.
Rothstein told the judge at the hearing on Wednesday that the former director of New World Gold “is physically incapacitated and has been in a coma for an extended period on life support” and that no one representing the company has ever responded to the lawsuit.
In the motion that was originally the subject of Wednesday’s hearing, Miller called on Judge Curley to rule that the shareholders’ meeting had a quorum, which made Miller’s election as director legitimate.
Rothstein said it was only after that meeting that Miller realized that there were more than 2 billion shares of New World Gold in circulation. That would normally make attending 450 million shares at a shareholder meeting well below the quorum for a voting group under a Florida statute.
Miller’s motion states that Curley has the power to retrospectively grant the quorum of the voting group in attendance.
The judge did not rule on the motion on Wednesday and gave Miller time to find a new lawyer.
New World Gold, whose shares are traded with a “No Information” warning on the Pink over-the-counter market, saw its share price rise sharply in the weeks after Miller sought and obtained a director position with the company.
But the share price also fell sharply after his indictment against other dormant, OTC-traded mailbox companies became known to investors almost two weeks ago through a CNBC article.
New World Gold said in several press releases earlier this month that it acquired a mining company in Wyoming with access to gold and lithium and identified properties in Nevada and South Dakota for potential mining. Lithium is a material that is used in batteries for personal electronics as well as electric vehicles.
The company also said in a recent news release that an Ohio attorney, Bob Honigford, has been named CEO and director. No SEC filing has reflected this move, and Honingford has not responded to any requests for comment from CNBC.
After CNBC reported on Miller’s charges, the Twitter account allegedly operated by New World Gold said in a June 19 post, “Miller has no control over the company’s activities or press releases and is NOT involved in any future expansion of the operations.”
New World Gold had no representatives at the trial on Wednesday.
When CNBC contacted the company at the email address provided in its press releases to solicit comment, the email address returned an error message.
Online discussion boards from stock buyers and sellers who have been following New World Gold for the past few days have included posts announcing a supposedly bright future for the company and brushing aside suggestions about Miller’s stake in the company.
But other posts have taken note of the criminal allegations against him and his connection with New World Gold.