Hmmm... More people dragged into this mess...
online.wsj.com
Ex-FBI Agent Is Jailed On Stock Fraud Charges
By JERRY MARKON
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- A former FBI agent accused of conspiring with a trader to manipulate the stock market also was working with a local law enforcement officer in New Mexico, who gave him information on companies under investigation but then agreed to testify against him, prosecutors said.
The existence of yet another alleged participant in the scheme was revealed Thursday by prosecutors, who urged a U.S. judge in Brooklyn to imprison the former FBI agent, Jeffrey A. Royer, before trial. The New Mexico officer, who wasn't identified, contacted the FBI last week, saying Mr. Royer had called him after the charges were announced and tried to "coach" his testimony, prosecutors said.
Judge Raymond Dearie responded by ordering Mr. Royer jailed pending another bail hearing early next week, when the officer might testify. The judge then called out: "Marshals!" And four U.S. Marshals took Mr. Royer into custody.
The allegations marked another escalation of the case against the rogue FBI agent, who prosecutors said earlier this week had unauthorized classified data among his belongings. Mr. Royer is charged -- along with current FBI agent Lynn Wingate, controversial short seller Amr "Anthony" Elgindy and two others -- with using confidential government reports on public companies to target stocks by selling them short and, in some cases, to extort free or cheap stock from companies. The two FBI agents have pleaded not guilty, while Mr. Elgindy's lawyer has denied the allegations.
Experts say that, if proved, the alleged involvement of FBI agents in the scheme -- by providing information from the FBI's Automated Case Support and National Crime Information Center databases -- would be almost unprecedented.
Lead prosecutor Kenneth Breen said Mr. Royer also called his old FBI office in Albuquerque and tried to learn the contents of more than 70 boxes of files seized by authorities. Both calls reportedly violated a judge's order that Mr. Royer not contact people involved in the case.
Mr. Royer's lawyer, Lawrence Gerzog, said he was "shocked" to learn of the tampering allegations and said Mr. Royer had called the New Mexico law enforcement officer only "to apologize to him for getting his name mixed up in this kind of thing."
Write to Jerry Markon at jerry.markon@wsj.com
Updated May 31, 2002
KJC |
