Divided Jury Causes Mistrial in Newport Beach Man’s Fraud Case

A federal court judge declared a mistrial late Monday in a securities and mail fraud case against a Newport Beach businessman and his two partners.

The trio had been accused of causing investors to lose at least $550,000 by manipulating stock in Abex Ltd., a Newport Beach holding company.

U.S. District Judge Laughlin Waters dismissed the jury after six days of deliberation. Last week and early Monday, the jury foreman and other jurors sent several notes to the judge indicating that two members of the jury were being uncooperative and had refused to discuss their positions on the 25 counts the government had filed against Lee Roy Shrout of Newport Beach, Ralph Ernstsen and E. Michael Furlong.

The jury hung on a 10-2 vote in favor of conviction on various counts before informing the judge that it could not reach a verdict.

“I’m certainly disappointed,” said Chief Assistant U.S. Atty. Richard Drooyan. Drooyan said he planned to retry the case.

Shrout, who was home recovering from heart surgery, according to his attorney, could not be reached for comment. Ernstsen and Furlong also were unavailable for comment.