Prosecutors at Fraud Trial Say Profit Was True Motive
By ERIC DASH
Published: January 15, 2005
n a final attempt to refute the claims of the two defendants, prosecutors argued yesterday that there was "overwhelming evidence" that the two, Anthony Elgindy and Jeffrey A. Royer, were working together to commit securities fraud and not to expose corporate crime.
Mr. Elgindy, a controversial Internet stock trader, is accused of receiving confidential government information from Mr. Royer, a former F.B.I. agent, and using it in an elaborate stock-selling scheme.
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Yesterday, prosecutors in Federal District Court in Brooklyn made a final effort to persuade the jury that both men should be convicted of securities fraud, market manipulation and obstruction of justice.
When the case resumes on Tuesday, the 10th week of trial, Judge Raymond J. Dearie will instruct the jury and it will begin deliberations.
Lawyers for the defendants maintained that prosecutors presented an "Alice in Wonderland" view of the evidence, distorting statements and events to bolster their case.
But prosecutors said yesterday that the facts were clear: Mr. Elgindy and Mr. Royer might talk about their ambitions for law enforcement glory but their motives were corrupted by financial gain.
"It was a made-up rationale to hide their true financial motives," the prosecutor, Kenneth Breen, an assistant United States attorney, said. "The relationship with the S.E.C. and the F.B.I. served as a cover story" so that Mr. Elgindy "could pretend to get information - not glean it."
Prosecutors said that the information about criminal investigations into companies was valuable to a short-selling stock trader like Mr. Elgindy. They suggested Mr. Royer had a profit-sharing agreement with Derrick Cleveland, one of Mr. Elgindy's associates who pleaded guilty to securities fraud and testified for the government. Defense lawyers argued that any agreement was made up by Mr. Cleveland, whose story, they said, could not be corroborated or believed.
Yesterday, Mr. Breen offered documents and testimony from several witnesses in an attempt to show that Mr. Cleveland was telling the truth.
Earlier yesterday morning, Mr. Elgindy's lawyer, Barry Berke, told the jury that the government's case was far from clear.
He argued that the prosecution's timetable was not always consistent, though Mr. Breen pointed out that the defense's version omitted crucial events. Moreover, Mr. Berke raised the question of venue and urged jurors to consider it in making a decision. The case is being tried in Brooklyn, which has long been the site of penny stock fraud cases.
But Mr. Elgindy ran his Web site in San Diego, Mr. Berke said. And Mr. Royer was an agent working in New Mexico and Oklahoma.
Mr. Breen said the government was justified in trying the case in Brooklyn because several of Mr. Elgindy's Internet followers lived there and it was where the investigation he and Mr. Royer are accused of interfering with had begun.
Mr. Berke told the jury again that his client never believed he was doing anything wrong.
But Mr. Breen maintained that it was all part of a larger effort to keep law enforcement at bay while concealing the truth. The defense would have you believe that "Mr. Elgindy was a caped crusader and a crime-buster extraordinaire," he said. "I submit to you he was a criminal."
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