Amr "Anthony" Elgindy, a former Colleyville resident and stock trader who came under federal scrutiny after 9-11, was convicted Monday of racketeering, securities fraud and extortion in New York for masterminding a stock- manipulation scheme.
Elgindy was convicted along with former FBI agent Jeffrey Royer, who was found guilty of racketeering, securities fraud, obstruction of justice and witness tampering for tipping off Elgindy to confidential FBI investigations.
Elgindy, 36, a short-seller with an Internet following, used the information from Royer to drive down stock prices and earn profits and to threaten executives with exposure unless he was paid off for withholding the information. Short-sellers make money by betting that stocks will decline in value.
The Egyptian-born Elgindy was the subject of a Justice Department investigation after 9-11 for allegedly trying to profit from prior knowledge of the attacks through a stock sale. Prosecutors said Royer, who was then at the FBI, alerted Elgindy to the inquiry, which eventually led law enforcement to uncover their stock manipulation scheme. No charges have been filed on the 9-11 allegations.
"Under the guise of protecting investors from fraud, Royer and Elgindy used the FBI's crime-fighting tools and resources actually to defraud the public, and to insulate themselves from detection and prosecution," Roslynn Mauskopf, the U.S. attorney for the Eastern District of New York, said in a statement.
"Elgindy's conviction marks the end of his public charade as a crusader against fraud in the markets."
The jury rejected defense arguments that Royer, then an agent in New Mexico, gave FBI data to Elgindy and another trader as part of a free-lance effort to flush out corporate fraud.
The Associated Press reported that Elgindy dropped his face into his hands and sobbed uncontrollably as the jury foreman read the verdict and U.S. marshals led him weeping from the courtroom.
Elgindy lived in Tarrant County from 1992 to 1998 and promoted himself as a watchdog against unscrupulous market operators. In an appearance on the ABC program 20/20 on May 2, 1997, Elgindy even portrayed himself as a gun-toting vigilante fighting mob control of the markets.
Although Elgindy most recently lived in San Diego, his Texas years were brought up by the defense and the prosecution during the 10-week trial.
In 1999, Elgindy pleaded guilty in Fort Worth to one count of mail fraud after federal prosecutors indicted him on nine counts of fraud. He was ordered to pay $20,000, serve four months in prison and serve three years' probation.
The prior felony conviction, say prosecutors, will be a factor in sentencing. U.S. District Judge Raymond Dearie has not set a date for sentencing, but Elgindy and Royer each face 10 to 15 years in prison. Their attorneys say they will appeal.
Elgindy, known for recklessly driving his red Ferrari when he lived in Texas and California, has been in jail in New York since April, when he was caught boarding a plane under a false name and carrying false documents.
The prosecution of other indicted Elgindy associates will continue, said federal officials, including fund manager Jonathan Daws of North Texas and Lynn Wingate, another former FBI agent who is Royer's ex-girlfriend. |
