UPDATE: Elgindy Defense Continues Closing Argument
DOW JONES NEWSWIRES
January 13, 2005 8:28 p.m.
(Updates beginning in fifth paragraph.)
By Carol S. Remond
Of DOW JONES NEWSWIRES
NEW YORK -- Defense lawyer Barry Berke told jurors Thursday the U.S.
government has not proved its case against short-seller Anthony Elgindy "by
a long shot."
Elgindy is accused of conspiring with former Federal Bureau of Investigation
agent Jeffrey Royer to manipulate the shares of small companies. Elgindy and
Royer were charged in the U.S. District Court for the Eastern District of
New York in a racketeering indictment in May 2002. The government alleges
that Royer pilfered secret information from FBI computers and shared it with
Elgindy and others who used it to manipulate the stocks of small companies
and, on two occasions, to extort discounted shares from them.
In the second day of his closing argument, Berke told jurors that Elgindy
often was able to gain information when he shared details about stock fraud
with securities regulators. "There is nothing illegal about that," he said.
"Federal agents, (Securities and Exchange Commission) lawyers and cops are
human beings. Some people are going to be chattier than others. They have
different styles.
"He's telling them things, and they're telling him things."
Berke told jurors that obstruction of justice charges filed against Elgindy
and Royer were unfounded. The two are accused of obstructing a post-Sept.
11, 2001, FBI investigation into suspicious trading before the terrorist
attacks on the U.S. That probe was the genesis of the current charges.
"There is no direct evidence, except for one thing, that Mr. Elgindy knew
about the 9-11 investigation," Berke told jurors. That one thing, Berke
said, is the testimony of Derrick Cleveland, who he said, can't be trusted.
Cleveland was also charged in the case. He pleaded guilty to conspiracy to
commit securities fraud and is cooperating with the government. Royer is
accused to have tapped into government files and learned about the
investigation and to have alerted Elgindy to the probe.
Berke said that Elgindy wasn't, as the government alleged, preparing to flee
when he traveled to Lebanon without proper authorization from his probation
officer in November 2001. The lawyer explained that Elgindy decided at the
last moment to travel to that country while he was visiting family in Egypt
where he was authorized to go.
Berke also explained away unreported transfers of large amounts of money to
Lebanon by Elgindy by telling jurors that he didn't have to tell his
probation officer about such transfers. The lawyer also told the jury that
Elgindy didn't have to report that he purchased a home in Lebanon.
Elgindy was in probation after a jail stint in 2000 for insurance fraud.
Accusing prosecutors of putting a nefarious spin on otherwise innocent
things, Berke said Elgindy didn't lie on a document to open a trading
account at Canadian brokerage firm Global Securities for a corporation he
controlled in November 2001. The document, introduced in court by
prosecutors, show that the beneficial owner of the corporation claimed to be
a resident of Lebanon. "Somebody at Global made a mistake", saw the
signature of Elgindy from Lebanon and thought that the beneficial owner was
a resident of that country, Berke told jurors.
Federal Judge Raymond Dearie told Elgindy's defense lawyers that they have
to complete their closing argument by noon Friday. Prosecutor Kenneth Breen
is then expected to present the government's rebuttal.
- By Carol S. Remond, Dow Jones Newswires; 201-938-2074 |
