DOCSLIB.ORG

Fbiagent Charged with Using Secret Recordsfor Stock Scheme

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

FBIAgent Charged With Using Secret Recordsfor Stock Scheme By Aaron Elstein, operation, and Lynn Wingate, who joined Laurie P. Cohen the bureau in 1999 and was relieved of And Gary Fields duty Tuesday night. Both are accused of providing confi The government charged an FBI dential information from FBI databases agent and a former one with giving stock to help Mr. Elgindy decide which compa traders confidential information about nies to target. "The allegations in the criminal probes of public companies, in a indictment reveal a shocking partnership short-selling scheme that spread unfavor between an experienced stock manipula able information to profit from driving tor and law-enforcement agents, under stock prices down. taken for their illicit personal financial The scheme was allegedly headed by gain," said U.S. Attorney Alan Vinegrad Anthony Elgindy, a colorful and contro in a prepared statement. versial investing • White-collar crime experts voiced figure who also is shock at the allegations, especially the known on the Inter- FBI agents' alleged involvement. "I've net as Anthony@Pa- never come across a case like this one," said Robert Mintz, a former federal pros an indictment an- ecutor who heads the government investi nounced by the gations practice at the Newark law firm of McCarter & English. "It seems incredi bly bold to use the government's own resources to orchestrate a stock-manipu lation scheme." v alleged that Mr. Elg- He said the confidential information Indy received infor- allegedly used in the scheme-from the mation from the FBI's Automated Case Support and Na FBI insiders about Anthony Elgindy tional Crime Information Center data criminal problems bases-would be a "gold mine" of informa or investigations related to public compa tion. The databases contain information nies, and then used the information to about companies and individuals under sell the companies' shares short and to criminal Investigation and their criminal extort stock from companies that feared histories, as well as information about manipulation of their shares. civil investigations undertaken by the Se A short-seller sells borrowed shares curities and Exchange Commission. and profits when a stock declines, so ex Two additional Elgindy traders. Der clusive access to negative information rick Cleveland and Troy Peters, were would be valuable. The six-count indict charged along with the other three with ment alleged that the scheme that racketeering and securities fraud conspir thrived on confidential information sup acy Messrs. Elgindy, Royer and Peters plied by two rogue agents-Jeffrey A. were also charged with extortion conspir Royer, who left the FBI's employ last acy. Ms. Wingate and Messrs. Elgindy December to join Mr. Elgindy's trading Please Turn to Page AlO, Column 1 AlO THURSDAY, MAY 23, 2002 THE WALL STREET JOURNAL. Two FBIAgents Chargedin Short-Selling Scheme Continued Prom First Page . number of different things in her tune." $2.2 million home. tions and cease disseminating "negative and Royer face additional charges of ob He said Ms. Wingate "intends to plead not The indictment says that starting in information" about the company being structing justice. The most serious guilty." Mr. McCue said that her financial 2000. Messrs. Elgindy and Cleveland "cor targeted. charge against each defendant carries a resources are "limited" and that counsel ruptly induced" Mr. Royer to provide them Mr. Elgindy, a 34-year-old native of prison term of up to 20 years. will be appointed for her in New York. with confidential law-enforcementinforma Cairo, Egypt, became something of a ce A person who answered Mr. Elgindy's David Kitchen, who was Special tion about companies whose stock they lebrity among Internet investors during cellphone said he wasn't available for com Agent in Charge of the Albuquerque FBI had sold short. After leaving the FBI to the headiest days of the technology-stock ment Calls to Mr. Elglndy's firm, Pacific office at the time of Ms. Wingate's ar join Mr. Elgindy's operation, it says, Mr. bubble. His messages on such stock-chat Equity Investigations, of San Diego, rival. says she came to work for him Royer allegedly persuaded Ms. Wingate to sites as Silicon Investor, usually recom weren'treturned. Messrs. Royer, Wirigate, fresh out of the FBI's training academy provide similar information fix)m FBI data mending investors sell shares he deemed Qeveland and Peters couldn't be reached. in Quantico. Va.. in the fall of 1999. Mr. bases. overpriced, were widely followed. Silicon The government said all five defendants Kitchen says Ms. Wingate was assigned In one alleged instance, Mr. Royer Investor members demanded Mr. Elgindy were arrested on Tuesday-Messrs. Elg- to the bureau's bank robbery squad for found criminal-history information in the be reinstated after he was suspended indy and Peters in California. Ms. Wingate about six months and was then "moved FBI database about Paul Brown, chief from the site in 1999 when his remarks and Royer in New Mexico, where they up" to the white-collar (irime squad, possi executive of Nuclear Solutions Inc., a got a little too caustic. He later started were most recently assigned with the FBI. bly putting her in touch with publicly small company based in Meridian, his own Web sites, AnthonyPacific.com and Mr. Cleveland in Oklahoma. traded companies under scrutiny. At the Idaho, and passed it to Mr. Elgindy, who and InsideTnith.com, charging people up Ms. Wingate was released on her own time Mr. Kitchen left the FBI. in May shorted the stock and distributed a report to $600 a month to see his picks first and recognizance. Mr. Royer was released 2000, Ms. Wingate was just getting to his subscribers last December calling read his often colorful comments. but must wear an electronic bracelet. started in her new assignment. Mr. Brown "a convicted felon." Nuclear Mr. Elgindy has a history of run-ins Both have been ordered to appear on "I am really surprised to hear she Solutions' stock fell sharply in the after with criminal authorities and securities- noon next Tuesday before U.S. District could be involved in something like that," math of Mr. Elgindy's report. Nuclear industry regulators. In May 2000,he was Judge Raymond Dearie in Brooklyn. Mr. Kitchen said. Solutions officials couldn't be reached for sentenced to four months in federal Doug Couleur. the court-appointed coun The indictment didn't say how much comment. prison and three years of probation for sel for Mr. Royer. said he will have a money the defendants netted from the The indictment says Messrs. Elgindy fraudulently collecting disability pay different court appointed counsel in New scheme, though Mr. Royer was alleged to and Peters would use the confidential in ments between May 1994 and February York next week, where Mr. Royer plans have been paid $30,425while he was still formation they collected from the FBI to 1995 while he continued to work as a to plead "not guilty." an FBI agent. In a separate action author make "extortionate demands" on compa stockbroker at Bear Steams. In 1997, he Stephen T. McCue. a court-appointed ities filed a civil suit seeking to seize nies that they knew were being investi was fined $30,000 by the National Associa federal defender who represented Ms. funds from numerous accounts held by gated by federal authorities. Once these tion of Securities Dealers for stock-trad- Wingate at Tuesday's hearing, said she is Messrs. Elgindy and Royer. as well as demands were satisfied, the indictment ing violations in 1993 that included im now assigned to the drug squad. He said Mr. Elglndy's Rolls Royce, Bentley. Jag says, Mr. Elgindy would tell subscribers properly using a trading system for retail she is "a solid line agent who has done a uar and Hummer automobiles and his to his Web site to exit their short posi customers. The NASD revoked Mr. Elg-.
Recommended publications
  • The Miscreants' Global Bust-Out: Preface | Deep Capture

    The Miscreants' Global Bust-Out: Preface | Deep Capture

    4/12/2019 The Miscreants' Global Bust-Out: Preface | Deep Capture Home About Enter your search keywords Story of Deep Capture Michael Milken and Dendreon The Movie Mitchell Report AntiSocialMedia Data Archive Podcast Categorized | Featured Stories, The Deep Capture Campaign The Miscreants’ Global Bust-Out: Preface Posted on 28 April 2011 by Patrick Byrne “A bust-out is a scheme customarily employed by organized crime to deplete the assets of a legit imate business, thus forcing it into bankruptcy.” State of New Jersey Commission of Investigation 1988 Report, “Subversion By Organized Crime And Other Unscrupulous Elements of the Check Cashing Industry” “BUSTOUT: a confidence scheme in which an established business is taken over, a large stock of merchandise is purchased on credit and quickly sold, and the business is then abandoned or bankruptcy is declared.” – Merriam-Webster Dictionary Mark Mitchell has continued exploring the financial instability of the last four years, including the crash of 2008 and the Flash Crash of 2010. His conclusion is that various activities associated with market manipulation (e.g., naked short selling, high frequency trading, derivatives such as Credit Default Swaps and synthetic CDOs, sponsored access, regulatory capture, press manipulation) follow a familiar leverage-and-loot pattern and can be traced to a fairly cohesive network that includes Italian and Russian organized crime, Sunni extremist financiers with ties to Al Qaeda, the Russian FSB, the Albanian Mafia, agents of the Iranian regime, and close associates of Michael Milken. The result, “The Miscreants’ Global Bust-Out”, is 230 pages long. DeepCapture will be publishing it in approximately 25 installments over the coming weeks.

  • X UNITED STATES of AMERICA : : V

    Case 1:02-cr-00589-RJD Document 502-1 Filed 12/23/2005 Page 1 of 117 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK --------------------------------------------------------------------x UNITED STATES OF AMERICA : : v. : Cr. No. 02 - 589 (S-2) (RJD) : Cr. No. 04 - 652 (RJD) ANTHONY (AMR) ELGINDY, : Defendant. : --------------------------------------------------------------------x SENTENCING MEMORANDUM ON BEHALF OF ANTHONY (AMR) ELGINDY Barry H. Berke, Esq. Eric A. Tirschwell, Esq. Erin A. Walter, Esq. KRAMER LEVIN NAFTALIS AND FRANKEL LLP 1177 Avenue of the Americas New York, New York 10036 (212) 715-9100 Attorneys for Defendant Anthony Elgindy KL3:2460366.14 Case 1:02-cr-00589-RJD Document 502-1 Filed 12/23/2005 Page 2 of 117 Table of Contents Page I. INTRODUCTION ...............................................................................................................1 II. ANALYSIS OF THE § 3553(a) FACTORS .......................................................................8 A. Section 3553(a)(1): History and Characteristics of Anthony Elgindy.................................9 1. Anthony Elgindy’s Childhood, Education and Early Employment.........................9 2. Anthony Elgindy Evolves from a Long to a Short. ...............................................14 3. Anthony Elgindy Has Provided Compassionate Assistance to Others..................21 4. Anthony Elgindy’s Struggles with Bipolar Disorder.............................................27 5. The September 11th Stigma and the Government’s Investigation and Prosecution
  • India's Biggest Scams

    India's Biggest Scams

    India's biggest scams The Satyam Computer Services fraud is neither the first nor will it be the last corporate scam to have hit India, so investors must be on guard and ask for more information before making any investment decision, says former Sebi chairman M Damodaran. Sound advice. But with corporates, brokers, banks, politicians, regulators colluding at times, many a multi-crore scam has hit India. And the saga is likely to go on. India has seen some of the most high-profile scandals where investors have lost billions of rupees just because a few people in high places could not control their greed.The Satyam Computer Services fraud is neither the first nor will it be the last corporate scam to have hit India, so investors must be on guard and ask for more information before making any investment decision, says former Sebi chairman M Damodaran. Sound advice. But with corporates, brokers, banks, politicians, regulators colluding at times, many a multi-crore scam has hit India. And the saga is likely to go on. India has seen some of the most high-profile scandals where investors have lost billions of rupees just because a few people in high places could not control their greed. Here's more about India's biggest scams... 1. Ramalinga Raju The biggest corporate scam in India has come from one of the most respected businessmen. Satyam founder Byrraju Ramalinga Raju resigned as its chairman after admitting to cooking up the account books. His efforts to fill the "fictitious assets with real ones" through Maytas acquisition failed, after which he decided to confess the crime.
  • The Story of Deep Capture

    The Story of Deep Capture

    The Columbia School of Journalism is our nation’s finest. They grant the Pulitzer Prize, and their journal, The Columbia Journalism Review, is the profession’s gold standard. CJR reporters are high priests of a decaying temple, tending a flame in a land going dark. In 2006 a CJR editor (a seasoned journalist formerly with Time magazine in Asia, The Wall Street Journal Europe, and The Far Eastern Economic Review) called me to discuss suspicions he was forming about the US financial media. I gave him leads but warned, “Chasing this will take you down a rabbit hole with no bottom.” For months he pursued his story against pressure and threats he once described as, “something out of a Hollywood B movie, but unlike the movies, the evil corporations fighting the journalist are not thugs burying toxic waste, they are Wall Street and the financial media itself.” His exposé reveals a circle of corruption enclosing venerable Wall Street banks, shady offshore financiers, and suspiciously compliant reporters at The Wall Street Journal, Fortune, CNBC, and The New York Times. If you ever wonder how reporters react when a journalist investigates them (answer: like white-collar crooks they dodge interviews, lie, and hide behind lawyers), or if financial corruption interests you, then this is for you. It makes Grisham read like a book of bedtime stories, and exposes a scandal that may make Enron look like an afternoon tea. By Patrick M. Byrne, Deep Capture Reporter The Story of Deep Capture By Mark Mitchell, with reporting by the Deep Capture Team Introduction - by Mark Mitchell I began working on a version of this story in January 2006, while serving as an editor for the Columbia Journalism Review, a publication tasked with upholding the standards of the American media.
  • Investing Online for Dummies, 6Th Edition

    Investing Online for Dummies, 6Th Edition

    01_228029 ffirs.qxp 11/16/07 11:36 PM Page i Investing Online FOR DUMmIES‰ 6TH EDITION by Matt Krantz 01_228029 ffirs.qxp 11/16/07 11:36 PM Page i Investing Online FOR DUMmIES‰ 6TH EDITION by Matt Krantz 01_228029 ffirs.qxp 11/16/07 11:36 PM Page ii Investing Online For Dummies,® 6th Edition Published by Wiley Publishing, Inc. 111 River Street Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2008 by Wiley Publishing, Inc., Indianapolis, Indiana Published by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permis- sion of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, (317) 572-3447, fax (317) 572-4355, or online at http://www. wiley.com/go/permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission.
  • Comment Letter

    Comment Letter

    During June and July of 2009 Deep Capture serialized a 48,000 word story about a network of market miscreants that includes disreputable financial analysts, prominent journalists, some of America’s best-known hedge fund managers, associates of the Mafia, and Michael Milken, the famous criminal from the 1980s. The story focuses on the travails of Dendreon, a company with a promising treatment for prostate cancer, but it describes market machinations that have affected hundreds of other companies, and it contains a larger message about the “deep capture” of our nation’s media and regulatory bodies. Now we publish the full, 15-chapter story as a single document…. * * * * * * * * This story, like too many others, begins with Jim Cramer, the CNBC personality, making “a mistake.” On September 26, 2005, Cramer announced to his television audience the sad news (punctuated by funny sound effects – a clown horn, a crashing airplane) that Provenge, an experimental treatment for prostate cancer, had flopped. Thousands of end-stage patients had been pinning their hopes on Provenge, but according to Cramer the treatment had just been rejected by the Food & Drug Administration. It would never go to market. This seemed odd, because Dendreon (NASDAQ: DNDN), the company developing Provenge, had not yet submitted an application for FDA approval. As everybody in the biotech investment community knew, in fact, Dendreon had only recently completed Phase 3 clinical trials and probably would not face scrutiny from an FDA advisory panel for at least another year. As for the likelihood that the advisory panel would eventually vote in favor of Provenge, the odds looked good.