What did the jury hear about NSOL?
A year later, Nuclear Solutions' CEO Dr. Paul A. Brown stepped up to
announce an agreement with Israel's Institute of Industrial Mathematics to
treat waste-water. At this time, Nuclear Solutions, Inc. was dipping into
the red. The Israeli contract would certainly lead to more nuclear-waste
reclamation projects, but Dr. Brown had secrets that jumped his claim to
optimism: an extortion plot and a shower of death threats engineered by an
Egyptian investment adviser in Florida, the business partner of a wealthy
Saudi "arms dealer."
Anthony Elgindy had recently been arrested for his involvement in a stock
swindle involving FBI agents and pilfered classified crime data. The
indictment filed against Anthony Elgindy noted that the FBI agents recruited
to his immediate crime family combed confidential federal files, and learned
that Dr. Brown at Nuclear Solutions had a criminal history. With this
information in hand, Elgindy immediately shot off an e-mailed threat to
Brown. He went on a binge of short-selling shares in Nuclear Solutions,
spread word of Dr. Brown's past on the Internet, barraged him with
threatening e-mails.3
But Dr. Brown was dead by the time Elgindy and his entourage were in
custody, and faced convicted felon status themselves.
thewebfairy.com
Nuclear Solutions
p. On December 19, 2001, at approximately 11:19
a.m. (Eastern Standard Time), the defendant JEFFREY A. ROYER
searched the NCIC database and found criminal history information
regarding Paul Brown, the founder of Nuclear Solutions, a company
listed on the Over the Counter Bulletin Board.
q. On December 19, 2001, at approximately 1:31
p.m. (Eastern Standard Time), the defendant AMR I. ELGINDY sent
an e-mail to his subscribers that stated: "NSOL - CEO, Dr. Paul
Maurice Brown, is a convicted felon ..."
r. On or about December 20, 2001 the defendant
AMR I. ELGINDY and others, began posting information regarding
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Paul Brown’s alleged criminal record on Internet bulletin boards
and chat rooms.
Company No. 5
s. On or about March 4, 2002, the defendant LYNN
WINGATE searched the ACS database and accessed nonpublic
information concerning the Chief Executive Officer of a company
listed on the NASDAQ National Market System ("Company No. 5").
t. On or about March 4, 2002, after the
defendant LYNN WINGATE’s ACS search described in overt act (s),
WINGATE telephoned the defendant JEFFREY A. ROYER.
B. Securities Fraud Conspiracy - Market Manipulation
42. The allegations contained in paragraphs 1 through
32 and 37 through 41 are realleged and incorporated as if fully
set forth herein.
43. In or about and between November 2000 and May
2002, both dates being approximate and inclusive, the defendants
AMR I. ELGINDY, also known as “Tony Elgindy” and “Anthony
Pacific,” JEFFREY A. ROYER, DERRICK W. CLEVELAND, TROY M. PETERS
and LYNN WINGATE, together with others, did knowingly and
willfully conspire to use and employ manipulative and deceptive
devices and contrivances directly and indirectly, by use of means
and instrumentalities of interstate commerce and the mails, in
contravention of Rule 10b-5 of the Rules and Regulations of the
United States Securities and Exchange Commission (Title 17, Code
21
of Federal Regulations, Section 240.10b-5), and directly and
indirectly to (a) employ devices, schemes and artifices to
defraud; (b) make untrue statements of material facts and omit to
state material facts necessary in order to make the statements
made, in light of the circumstances under which they were made,
not misleading; and (c) engage in acts, practices and a course of
business which would and did operate as a fraud and deceit upon
members of the investing public, in connection with purchases and
sales of various securities, in violation of Title 15, United
States Code, Sections 78j(b) and 78ff, all in violation of Title
18, United States Code, Section 371.
44. It was a part of the conspiracy that between
November 2000 to May 2002, both dates being approximate and
inclusive, the defendants AMR I. ELGINDY, DERRICK W. CLEVELAND
and JEFFREY A. ROYER, together with others, devised, implemented
and oversaw a fraudulent scheme to deflate artificially the price
of various companies’ stock that they had short sold and then to
profit by buying it back later at a lower price. ELGINDY,
CLEVELAND, ROYER and others sought to accomplish their
manipulation by coordinating the release of negative information
with short selling in a manner designed to exaggerate the
negative market sentiment for the stock.
45. It was further part of the conspiracy that the
AnthonyPacific.com subscribers received the information and
22
recommendations first, so that they could position themselves to
profit if the market reacted to the exaggerated negative market
sentiment for the stocks, and so that a portion of their profits
would be paid back to the defendants AMR I. ELGINDY in the form
of subscription fees.
46. In furtherance of the conspiracy and to effect the
objectives thereof, the defendants AMR I. ELGINDY, DERRICK W.
CLEVELAND and JEFFREY A. ROYER, and their coconspirators
committed and caused to be committed the following:
OVERT ACTS
a. On December 19, 2001, at approximately 11:19
a.m. (Eastern Standard Time), the defendant JEFFREY A. ROYER
searched the NCIC database and found criminal history information
regarding Paul Brown, the founder of Nuclear Solutions, one of
the Targeted Companies.
b. On December 19, 2001, at approximately 1:31
p.m. (Eastern Standard Time), the defendant AMR I. ELGINDY sent
an e-mail to his subscribers that stated: "NSOL - CEO, Dr. Paul
Maurice Brown, is a convicted felon ..."
c. On or about December 20, 2002, the defendant
AMR I. ELGINDY and others, began posting information regarding
Paul Brown’s alleged criminal record on Internet bulletin boards
and chat rooms.
23
d. On December 22, 2001, the defendant AMR I.
ELGINDY sent an e-mail to his subscribers that stated: "Convicted
Felon Brown ... has history of lying & fraud..."
e. On or about December 24, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
f. On December 26, 2001,the defendant AMR I.
ELGINDY sent an e-mail to his subscribers that stated: "NSOL -
info on [a Nuclear Solutions executive] the scumbag [attorney]
... has been disbarred..."
g. On or about December 27, 2001, the defendant
AMR I. ELGINDY sent an e-mail to his subscribers that stated:
"NSOL -- if u are short you need to [private message] me how
many."
h. On or about January 2, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
i. On or about January 3, 2002, the defendant
AMR I. ELGINDY sent an e-mail to his subscribers that stated:
"NSOL -- short 20% @ 2.05 (add).
j. On or about January 3, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
k. On or about January 9, 2001, the defendant
DERRICK W. CLEVELAND short sold the stock of Nuclear Solutions.
l. On or about January 16, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
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m. On or about January 24, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
n. On or about January 25, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
o. On or about January 30, 2002, the defendant
AMR I. ELGINDY in a chat room discussion with his subscribers,
stated "We are pulling out of NSOL" and "NSOL <--- coverage
[terminated] for good."
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