More on Anthony Elgindy.....
[Elgindy/shorters] "Man of many faces fights federal charges of fraud
AMR I. ELGINDY HAS THRIVED ON THE MARGINS OF THE STOCK
MARKET
By David Barboza and Alex Berenson
New York Times
[Posted on Sat, Jun. 08, 2002 ]
The faces Amr Ibrahim Elgindy offered the world were as different as the
names he used.
To the investors who paid him hundreds of dollars a month for stock tips that
were often uncannily accurate, Elgindy was Anthony Pacific.
To the Muslim refugees he brought from Kosovo to the United States, he was
Tony Elgindy, a benefactor who provided cars, apartments and even cash --
and asked for little in return.
But to the regulators and prosecutors who chased him throughout the 1990s,
he was Amr I. Elgindy, a man they considered a liar and thief who avoided
prison mainly because of his willingness to turn in co-conspirators in stock
frauds.
Now Elgindy is moving from a San Diego jail to one in Brooklyn, N.Y.,
charged with running a stock manipulation ring that is said to have included
two FBI agents who tipped Elgindy to current criminal investigations.
Meanwhile, the investigation is widening, as the authorities publicly question
whether Elgindy, who is Muslim and was born in Egypt, had advance
knowledge of the Sept. 11 attacks.
So far, evidence backing that suspicion is scant. Jeanne G. Knight, Elgindy's
lawyer, said that he had done nothing wrong and that he had no prior
knowledge of the Sept. 11 attacks. In an interview, Knight accused the
government of a form of racial profiling for denying him bail in part because of
Sept. 11.
Still, the arrest and the charges against Elgindy, 34, have put him in the public
eye and on the edge of ruin. He has been both places before.
Over the last decade, Elgindy chiseled a small fortune out of the often sleazy
world of penny stocks, tiny companies that can double in a day and fall just as
fast on waves of rumor and speculation. Along the way, he played off the
fringe brokerage firms that pump penny stocks up against the short-sellers
who try to take them down, and he became a source of tips for both
regulators and journalists.
``He always had an in with somebody,'' said Stuart R. Allen, a former
investigator with the Securities and Exchange Commission. ``If it wasn't the
authorities, it was the press.''
In the backwaters of the securities industry, where brokers can look more like
bouncers and criminal records are common, the battles between long-sellers
and short-sellers can be vicious and personal.
Carried a handgun
Elgindy seemed to thrive on the tension. On ABC's ``20/20'' five years ago,
he said with relish that he carried a handgun and had ``received a bullet in the
mail, a bullet with my name on it.''
``Three-hundred-pound guys walking into an office beating you up, making
you do this, do this,'' he said. ``It's happening. It's happening on Wall Street.
That's not going to happen to me.''
As his fortune grew, Elgindy acquired the trappings of wealth, including a
Ferrari, a Bentley and a Hummer. Last year, he moved with his wife and three
young sons into a $3 million house in the wealthy northern suburbs of San
Diego.
But the money apparently did not change Elgindy's behavior. His own lawyers
have called him ``edgy'' and ``intimidating.'' Several neighbors recalled being
irritated by his speeding along the narrow, hilly streets near his new home.
``It was obvious he had achieved a certain level of success,'' said one
neighbor, Rick Engebretsen. ``You'd think a certain amount of maturity would
come along with that. But it didn't as far as I could tell.''
Engebretsen watched one morning last month as FBI agents stormed
Elgindy's mansion.
``He seemed squirrelly, wiry. On the surface level he was OK, but my wife and
I had a terrible feeling about him,'' Engebretsen said. ``Was I surprised that I
saw his house raided? No, I wasn't. I'd thought he was going to come out of
there in a body bag or a raid.''
Before the million-dollar homes and flashy cars, Elgindy was struggling to
make his mark in a new world after his family moved from Egypt to the
suburbs of Chicago when he was 2 or 3.
From an early age, he had difficulty living up to the high expectations his
family set, he told friends. His father was a professor, his mother was a
pediatrician, and his two brothers went on to earn advanced degrees. His
own path, he conceded, was more tortured.
He dropped out of high school and got an equivalency degree in 1985. He
enrolled at the University of Southern California to study biomedical
engineering and later studied biology at San Diego State, but he completed
less than two years of course work, university records show.
Trouble found him early. In 1986, at 18, he was arrested for assault with a
deadly weapon in Los Angeles; the charges were later dropped. He worked
as an auto salesman at three different Chevrolet dealerships within a year
before entering the murky world of buying and selling penny stocks.
Share manipulation
His résumé includes some of the most notorious brokerage firms in the
industry, the ``pump and dump'' shops that had long histories of manipulating
stock prices and leaving investors out in the cold. Among the firms he joined
was now-defunct Blinder Robinson, nicknamed ``Blind 'em and Rob 'em.''
Elgindy later confessed to authorities that he and brokers at another firm had
accepted bribes from stock promoters seeking to manipulate shares.
According to court records, in 1995 he was granted immunity in exchange for
information about the scheme.
With his cooperation, federal prosecutors won convictions against four
people on tax evasion charges. That was the beginning of Elgindy's life as a
government informant, documents show. At a time when Wall Street was
overrun by penny stock fraud and even the influence of organized crime, he
helped government agents navigate the terrain. In court, the government has
acknowledged that his tips were valuable.
Elgindy, who moved to Texas in 1994 to run his own brokerage firm, liked to
boast about how he began wearing a wire. He also started carrying a gun, a
small Colt .380, because he had been repeatedly threatened, he said. When
reporters visited his home, he would play tapes of secretly recorded
conversations and show off his gun collection.
By the late 1990s, Elgindy had repackaged himself as a short-seller who blew
the whistle on crooked companies and wise guys.
As early as 1997, though, Elgindy began to run into legal troubles. He had
worked briefly for Bear Stearns in 1994 and later lost a civil suit over his firing
by that firm. He was also sued by the insurance company MassMutual, which
accused him of fraud for accepting disability checks worth $7,500 a month in
1994 for unemployment attributed to ``emotional stress'' even though he was
employed at Bear Stearns and another brokerage firm at that time.
That case was referred to the Justice Department and in 1999, while living in
San Diego, he was indicted by a federal grand jury in Texas. He pleaded
guilty to insurance fraud and was sentenced to four months in a California
prison.
Short-seller
When he was released in October 2000, Elgindy resumed his position as a
prominent short-seller on the Internet. He also began assisting the
government in investigating cyberspace scams, he said.
At a probation hearing in January 2002, his lawyer told the judge that Elgindy
was a good citizen who had traveled to Kosovo and helped resettle refugees
in the United States.
His case was supported by a letter from Jeffrey A. Royer, an FBI agent in
Gallup, N.M., who said that Elgindy had ``gone above and beyond to assist
law enforcement and civil regulatory agencies in combating fraudulent
activities.''
The FBI now says the letter, which was undated and not on official letterhead,
is suspect.
Indeed, by the time of that letter, the Justice Department had opened an
investigation into Elgindy's activities. After Sept. 11, the government said, a
Wall Street broker told federal officials that Elgindy had tried to sell $300,000
in stock in anticipation of a market plunge. He placed his order on Sept. 10.
As part of that inquiry, the government said it uncovered a broader plot that
involved Royer, who had left the FBI in December to work for Elgindy.
In a 33-page indictment handed up two weeks ago, the government portrayed
Elgindy as a con man's con man. For the last two years, the government
contends, Elgindy led a double life: He told people he was helping the
government uncover stock market manipulation, but instead, the indictment
charges, he was bribing FBI agents to supply him with information to commit
his own frauds.
Elgindy and four others, including Royer and another FBI agent, were charged
with fraud. They have all pleaded not guilty.
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© 2001 mercurynews and wire service sources. All Rights Reserved.
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