Skip to comments.Trader, FBI Agent Convicted in Stock Case
Posted on 01/24/2005 11:57:20 AM PST by Calpernia
A former FBI agent and an Internet penny stock adviser were convicted Monday of mining government computers for confidential information they used to manipulate the stock market.
Former agent Jeffrey Royer was convicted of racketeering, securities fraud, obstruction of justice and witness tampering for leaking details of FBI investigations and executives' criminal histories to San Diego stock picker Anthony Elgindy.
Elgindy was convicted of racketeering, securities fraud and extortion for his role in the scheme. He dropped his face into his hands and sobbed uncontrollably as the jury foreman read the verdict; U.S. marshals led him weeping from the courtroom.
Prosecutors said Elgindy bet against penny stocks and drove down their prices by publicizing damaging information he received from Royer. Elgindy also extorted companies by offering to withhold the information in exchange for cash, prosecutors said.
Royer even tipped off the Egyptian-born financial analyst to an FBI probe into whether he profited from advance knowledge of the Sept. 11, 2001, terrorist attacks by selling off stocks that plunged after the attacks, prosecutors said. Elgindy was not charged in that investigation.
Defense attorneys contended that Royer fed FBI data to Elgindy and another trader as part of a freelance effort to sniff out corporate fraud. They argued that Royer believed Elgindy needed the information as a starting point for finding out more about companies that he and Royer could investigate together.
Elgindy's defense similarly argued that the trader released the government information on his subscription Web site because he was crusading against corporate malfeasance.
Royer was an agent in the Gallup, N.M., office investigating mostly crimes on Indian tribal land. He planned to leave the FBI and work as a private investigator for Elgindy and other traders, prosecutors said. Royer also thought the trader and his associates would help him pay off tens of thousands of dollars in personal debt, they said.
The charges carry a potential sentence of 10 to 20 years in prison.
After Royer and Aldrich, shouldn't there be FBI software to track washed up, deeply indebted failures (investigating crimes on Indian reservations ? Talk about one way trips to Palookaville.) in their ranks ?
See. I keep telling everyone that there is a quiet housecleaning going on in the government. The media ignores it, for the most part. But in all levels, the corrupt are being rooted out. I have been noticing each small case, but no one else seems to have noticed.
It all stems from the courage, conviction, and morals of a lead person and the staff he has surrounding him.
Even a blind hog finds an acorn now and then.
>>>> I have been noticing each small case, but no one else seems to have noticed.
Not everyone can connect the dots.
I look forward to this year, 2005 :)
Every organization has people who have been passed over and are pretty much stuck where they are. For lifer careers, where moving laterally to another organization would be difficult to impossible, this creates a tremendous resentment and sense of failure.
In security, these are security risks. Practically everyone plateaus professionally at some point, but how do you find the people who resent it ?
Good riddance to both of them. Wonder how much sniveling Elgindy did for the many victims of his crime.
I had sized up Tony as a sociopath maybe the first week I read his blabberings on Silicon Investor. Agreed, good riddance.
Amr Elgindy Arrested While Under House Arrest - 4/19/04
Elgindy Arrested Saturday At NY Airport Using Fake ID
By Carol S. Remond
Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Embattled shortseller Anthony Elgindy is back in jail just over a month before the scheduled start of his trial on charges of securities fraud and racketeering.
Elgindy was arrested in May 2002 and charged in a case involving the use of confidential government information to manipulate the stock of several small-cap companies.
Elgindy had been out on a $2.5 million bail, which was revoked Monday by federal judge Raymond Dearie.
According to a sworn affidavit, Elgindy was arrested Saturday at the MacArthur Airport in Islip, N.Y., attempting to board a plane using a fake ID. The Southwest Airlines plane was headed to Phoenix with a connecting flight to San Diego.
The boarding pass issued to Elgindy bore the name of Manny Velasco. Elgindy was also in possession of a fake Montana state ID, with his picture that listed the name Herbert Manny Velasco.
Elgindy was carrying $25,000 in cash and some $40,000 in jewelry at the time of his arrest. He also had four cellphones and various electronic devices. According to the affidavit, when he was arrested, Elgindy denied that he was Tony Elgindy and said that Elgindy was the person who he had gone to see in New York.
Elgindy and five co-defendants were charged in 2002 on charges they conspired to drive down the price of the shares of companies they targeted in a short-selling scheme.
Also charged in the 2002 case are two former FBI agents, Jeffrey Royer and Lynn Wingate; two traders, Troy Peters and Derrick Cleveland; a fund manager, Jonathan Daws; and Elgindy's Web master, Robert Hansen.
Cleveland has pleaded guilty to racketeering and Hansen has pleaded guilty to one count of conspiracy to commit securities fraud. Both are cooperating with the government.
Under the conditions of his bail, Elgindy had worn a GPS bracelet at all times while in San Diego where he resides. The bracelet was removed when Elgindy was allowed to travel on pre-authorized trips to meet with his lawyers in New York.
At the time of his arrest, Elgindy also carried an identification card in the name of Heriberto M. Velazco.
- By Carol S. Remond, Dow Jones Newswires; 201-938-2074
Dow Jones Newswires
CLEAN UP!!! :)
Thanks for adding that on Piasa! I forgot to bookmark this thread :)
Thanks for the ping!
And the cleanup continues. This is good news.
Good for you. Thanks for posting this.
We may know all about who benefitted from the Stock Market on 9-11, if we wait.
What a difference a good President makes.
The clintons don't serve jail time, but all who served under them do. It does not seem fair.
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