A@P; Amr &quot;Anthony&quot; Elgindy Discussion; Anthony@Pacific

Top 163. May 26, 2002 3:33 PM

» Poppa_Bubble - Poor guy

Funny thing about Anthony was that he was an outspoken critic of Tokyo Joe and took great delight in his getting nailed. Perhaps he was secretly jealous of TJ's fame as the biggest scumbag on SI. Guess what comes around, goes around.

Anyway, congrats to Anthony. He even gets prime coverage from Alan Abelson this week. A short respite in prison and I'm sure we'll see him back in action.

-- posted by Poppa_Bubble

Top 164. May 26, 2002 8:24 PM

» Jen_ - Re: Poor guy

In response to message posted by Poppa_Bubble:

Anyway, congrats to Anthony. He even gets prime coverage from Alan Abelson this week. A short respite in prison and I'm sure we'll see him back in action.

Here's Alan Abelson's column in 5/27 Barron's....

Bin Buying?

By ALAN ABELSON

Man, he's back! and this time he's long.

We're talking about Osama bin Laden and his return to the stock market.

It figures, of course. With the U.S. bombing to sheikdom come those cool caves in Afghanistan where he used to keep his stash, and the relentless crackdown on the phony fronts that were so handy for funneling it to wannabe martyrs around the globe, what Osama hasn't bin laden with lately is ready cash.

So he decides to replenish his coffers by stocking up on Dow and S&P futures. (Last time, the satanic Saudi made a killing, so the story ran, by going short in advance of 9/11.) And, displaying real Street smarts, he floats a rumor on Wednesday -- which, alas, proved greatly exaggerated -- that he's dead. (We can hardly wait for the video showing him all chuckles as he tells his partner in crime, that chubby one-eyed Mullah, how he made all that moola.)

Gotta give the devil his due. Buying into a falling stock market late in the session, feeding the rumor mills with the one piece of news sure to send prices higher -- the report of his own demise -- and then folding his tent and cashing out stacks up as a first-rate job of rigging.

There was a certain hesitancy among traders in responding to the rumor because they couldn't immediately place the name. Which isn't too surprising, really. Uttering it out loud has been labeled strictly unpatriotic by Washington, since it's apt to remind the citizenry that the oily rogue has given us the slip and no one, least of all the people who spend $30 billion a year of the taxpayers' money doing "intelligence" (imagine the tab they could run up if they were doing "stupidity"), has the faintest clue as to which rock he's hiding under.

Perhaps we shouldn't be too hard on the poor lads and lassies in outfits like the FBI charged with the awesome task of rooting out terrorists. For, it turns out, Wall Street, by distracting them from their relentless pursuit, must share some of the blame for their failure to bring to ground nasties like bin Laden.

That is the purport of an indictment handed down last week in federal court in the Eastern District of New York. It charged a small pack of predatory short sellers (or is that redundant?) led by one Anthony Elgindy, also known as Tony Elgindy and Anthony Pacific, with getting confidential info from Justice Department databases and then bad-mouthing some Bulletin Board beauties on the Web, first, of course, taking pains to sell the stock of those companies short.

But what else is new is that the confidential info with which the short sellers carried out their dirty dealings allegedly was supplied by a couple of FBI agents, one of whom quit the Bureau to join Elgindy & Co. full-time.

Admittedly, providing classified information to short-sellers is a whole different order of sleaze from providing classified information to the Russians, as that infamous FBI creep Hanssen did. Still, beyond an obvious character flaw, the FBI fellow's trafficking with short-sellers is evidence of an appalling lack of taste. We mean, didn't he ever ask himself whether he'd like his sister to marry one of them?

The point, in any case, is that it's tough enough to track down a nut sending anthrax through the mail or preventing a fundamentalist crazy from blowing up the Brooklyn Bridge, let alone nail the wily bin Laden. But it's infinitely tougher if, while engaged in such vital endeavors, your mind is really on when some cheesy little stock selling for a buck will finally hit a quarter.

Any serious scholar of the subject will attest that the nation's intelligence operations began going to pot when Bill Casey headed the CIA and spent at least as much time speculating in stocks as he did speculating on what the Bolshies were up to. And, if it emerges that bubble mania encompassed a wide swath of FBI personnel and not just a stray pair of agents, that pretty much would clear up the mystery of why the Bureau in recent years has been prey to an epidemic of egregious gaffes.

To its credit, the stock market shook off the truly depressing news that Osama was still among the quick and, after moping around until the last hour, managed another gain on Thursday. (Friday's dispirited action doesn't count since there was the traditional pre-Memorial Day rush out of the trenches by Street folk to be first in line at the barbecue.) What helped stocks gain a little traction in the penultimate session were supposedly bullish economic reports on durable goods and employment.

The operative word in that last sentence is "supposedly." For, in truth, the "good news" loses much of its luster under closer scrutiny. The "improvement" on the labor front turned out to be a decline of 9,000 in the weekly total of new claims for unemployment insurance. But since the total of such claims remained a sizable cut above 400,000, and the number of idled workers rose 29,000 to 3.87 million, the numbers hardly merit even a muted hurrah.

Nor, we submit, is April's 1.1% jump in new orders for durable goods deserving of the hearty cheers it elicited. The increase was a lot better than the brokerage-firm hired hands who keep tabs on the economy anticipated (they forecast a 0.4% rise), but so what? This a statistic that can swing wildly from month to month and is remarkably immune to accurate consensus estimates. Much less noted, though we suspect more significant, is that unfilled orders were off.

In other words, what firmed up stocks from their early-in-the-week wobbles was nearly as dubious as the lamentably unfounded rumors of bin Laden's passing.

Except for the occasional burst upward and the odd tumble, what has been noteworthy about the market lo, these many weeks has been its irresoluteness. In part, this desultory behavior reflects fears of the havoc Mr. Spitzer and Congress may wreak. In part, it's the discouraging sight of so much of Wall Street's and Corporate America's dirty linen hanging out there in broad daylight.

But we also suspect that, contrary to all the happy sounds issuing from the drum beaters and cheerleaders, the market shares our sense that what we're seeing is an okay but not great recovery. Nothing, for sure, to justify 30 times this year's earnings.

<img src="/files/mysites/jen14/productivitygrowth.gif" width=369 height=257 align="right"> The chart that accompanies these scribblings is the handiwork of Stephanie Pomboy, who puts out a new, smart, informative and quite lively economic commentary called MacroMavens, which as its name implies, focuses on the big picture (which is what economists did before they became minutiae addicts).

What the chart makes clear, Stephanie notes, is that "the recent gains in productivity, far from being miraculous," are both cyclical and ordinary. Nor is she all that impressed by the fact that the gains persisted through the recent recession, since what distinguished the recent recession was that while corporate profits got slammed, consumption really never faltered.

Stephanie traces the hullabaloo about productivity to a certain Alan Greenspan, who more or less invented the notion of a New Economy productivity miracle as an alternative to taking unpopular action on the monetary front.

We plead guilty to committing a gross simplification of her analysis, but we think we've captured the essence of it and we found it reasonable and persuasive. Reasonable because we never bought the silly notion of a New Economy, so we couldn't very well believe a fabrication could yield a miracle. And persuasive because Alan Greenspan is, well, Alan Greenspan, the man who likes to be liked.

As it happens, Goldman Sachs's Bill Dudley, whose stuff invariably is top-drawer, last week offered his variation on the productivity theme. Bill evinces as little enthusiasm as Stephanie does, or for that matter, as we do for viewing the leap forward in productivity during the mad capital-spending spree of the Nineties as miraculous. Instead, he dubs the boom in capital investment "an overshoot," and suggests no one hold their breath waiting for a repeat.

The recent spurt in productivity growth he flat-out calls a "cyclical phenomenon," pointing out that productivity always moves up in the initial stages of an economic rebound. But, he warns, "the long-term productivity outlook has become less rather than more favorable."

And he ticks off the reasons why. To the dim prospects for a revival of a Nineties-style capital-spending boom add the switch back from tightwad to big spender by Uncle Sam, a change certain to take its toll on private investment; the trend away from free trade to bad old protectionism; and the slackening of the drive to deregulate, for which we can thank the fact that so much of the economy already has been deregulated but which also reflects the reaction to Enron et al.

What he foresees is 2% to 2½% annual growth in productivity, which, splitting the difference, would be ¾% higher than that averaged in the '73 to '95 stretch, but a good cut below the more exuberant gains the crowd expects.

That, says Bill, translates into something like 3%-a-year gross domestic product growth, the risk of a rise in inflation over the medium term, a weaker dollar and relatively low real interest rates. Which, he postulates, would make equities and ordinary Treasury bonds vulnerable (the former because long-term earnings growth would suffer; the latter because of the greater risk of inflation). Contrariwise, inflation-indexed Treasury bonds, or TIPS, shape up as likely winners.

The indefatigable Doug Kass points out to us an interesting and unpublicized item in Dell Computer's 10K, released a few weeks ago. The premier computer maker is a partner, it turns out, in an off-balance-sheet partnership called Dell Financial Services. The other partner is none other than Tyco International, through its CIT sub that Tyco dearly wants to unload.

Dell Financial offers Dell's customers, whether of the business or consumer persuasion, financing via CIT for purchasing Dell computers. According to the 10K, the joint venture did $2.7 billion in such financing in fiscal 2002, $2.5 billion the previous year and $1.8 billion in fiscal 2000. As Doug marvels, "That's a whole lot of computers!"

Equally worth remarking is that in this partnership the partners aren't necessarily equal. All of Dell Financial's losses automatically go to CIT (read: Tyco). And the net income is split this way: 70% to Dell, 30% to CIT (read: Tyco), after the latter recoups its losses.

As Doug exclaims, this is a heap of rapidly depreciating computers to lay on Tyco/CIT, especially since Tyco/CIT takes all of the risk but is restricted to only a 30% cut of the profits.

And, Doug also notes, the Financial Accounting Standards Board's new accounting recommendations are aimed at putting entities like Dell Financial Services back on the balance sheets of its parents, i.e, Dell and Tyco.

Subscribe to WSJ & Barron's Online @ http://www.wsj.com

.....Jen

-- posted by Jen_

Top 165. May 28, 2002 12:22 PM

» Kirk - "Checkered Past"

.
Maria B. is about to do a feature on A@P's "Checkered Past".

-- posted by Kirk

Top 166. May 28, 2002 1:11 PM

» Thruhiker -

-- posted by Thruhiker

Top 167. May 31, 2002 2:44 PM

» Kirk - I was intervied today for a story...

.
Kirk's Interview

I was interviewed this AM by a reporter for the San Diego Union-Tribune just because I have a discussion thread with some A@P posts here.
(Dean Calbreath a Fellow CAL graduate it turns out and I probably read some of his writing at the Daily Cal while I was in school there! He is a couple of years older, but wrote for them while I was there.)

The reporter said Anthony still has his house in San Diego but went to NY to deal with the legal issues (i.e. A@P is in jail now!) He also said that some of the charges could have come from companies that Anthony shorted and they were getting even...by claiming he extorted shares from them to stop the short attack... but I don't see how that matters for the charges of getting inside FBI info that anyone should know would be illegal inside information and jail time is deservd if you trade on it for a profit.

He said the story should run Sun or Mon here http://www.uniontrib.com/

Hoepfully, someone will find the story and post it here incase I forget. Here is a search link http://signonsandiego.master.com/texis/m...

-- posted by Kirk

Top 168. Jun 8, 2002 8:09 AM

» Kirk - Man of many faces fights federal charges of fraud

In Today's (Saturday) Business Section, front page.
http://www.bayarea.com/mld/mercurynews/b...

Posted on Sat, Jun. 08, 2002

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

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.

-- posted by Kirk

Top 169. Jun 8, 2002 11:21 AM

» Jen_ - Re: Man of many faces fights federal charges of fraud

In response to message posted by Kirk:

WOW!?!?!

A@P's first post on this thread....

Author: AnthonyPacific
Date: August 25, 1999 9:48 PM
Subject: The Subject is to find over valued and suspect companies.

Here we go, This wil be an alternative for those who want to continue our mission and expose those who take advantage of the public!

.....Jen

-- posted by Jen_

Terror Probe's Long Tendrils

Top 170. Jun 8, 2002 3:20 PM

» Jen_ - Re: Man of many faces fights federal charges of fraud

In response to message posted by Kirk:

More detail on the Elgindy investigation in 5/24 & 28 WSJ...

Reach Into Wall Street's Fringe

By MICHAEL SCHROEDER, GARY FIELDS, IANTHE JEANNE DUGAN and AARON ELSTEIN
Staff Reporters of THE WALL STREET JOURNAL

The investigation that led to charges against five people, including a current and a former FBI agent, with using confidential government data to manipulate stock prices was an almost accidental result of probes into the Sept. 11 terror attacks and to some degree convicted spy Robert Hanssen.

Authorities began looking into the activities of Anthony Elgindy , an Egyptian-born investor who was among those indicted, as part of the wide-ranging net cast by investigators looking for potential financiers of Muslim groups with links to terrorism last fall, according to a Federal Bureau of Investigation official.

That inquiry found nothing connecting Mr. Elgindy with terrorist groups or their financing, but eventually led authorities to believe he was getting information from FBI insiders, who clued him into confidential data about public companies facing criminal problems or investigations. So close was Mr. Elgindy to Jeffrey Royer, the former FBI agent charged in the case, that Mr. Royer wrote a letter identifying himself as an FBI agent vouching for Mr. Elgindy's help "in combating fraudulent activities via the stock market and Internet."

The indictment, which alleges that he used the information from two rogue federal agents to target stocks and to extort free or cheap stock from companies, puts the spotlight on investors and companies operating on the fringes of Wall Street.

Mr. Elgindy , a widely followed but controversial stock trader and commentator on the Internet, was known for mostly taking aim at very small companies with little revenue or earnings. Many get no attention from analysts at big investment firms, and don't even trade on a stock exchange, but rather are quoted on the OTC Bulletin Board, a quotation service for tiny stocks. As a result, they often are thinly traded -- with relatively few shares bought and sold each day -- and thus are easier to manipulate than bigger stocks.

The origins of the FBI's terror-related interest in Mr. Elgindy are unclear. But it might have stemmed from a tip that was provided by angry executives from small companies who banded together to fight him for wreaking havoc on their stock by short-selling -- selling borrowed shares in hopes of turning a profit if the stock falls.

After Sept. 11, these executives approached the FBI with a tip about Mr. Elgindy's possible short-selling of key industry stocks ahead of the terrorist attacks, the executives involved said. His adversaries also pointed out that Mr. Elgindy is a Muslim whose brother, Khaled Elgindy , is active in Islamic advocacy groups in Washington. Khaled Elgindy delivered humanitarian aid to Iraqis in May 1998 with a U.S. group called the International Relief Association, according to news accounts at the time.

A person with knowledge of the probe said the Securities and Exchange Commission also looked into whether Mr. Elgindy profited from the attacks, but found nothing untoward. Neither did a Justice Department inquiry, an official said.

At some point last year, however, the FBI's interest into Mr. Elgindy morphed into a securities-fraud investigation of his trading patterns. Last fall, the FBI got in touch with the SEC for help in analyzing his trading records.

Piquing the investigators' interest was the quality of the information he was putting out over the Internet about companies he focused on. Some of it seemed to make references to criminal histories that could have come from the FBI's National Crime Information Center database, while other tidbits seemed to come from the FBI computerized case-file system.

"A lot of that information would be considered insider information and could impact companies and stock prices," said the FBI official. "It didn't take much to figure this information is coming out of our confidential files."

Once authorities realized that, they began focusing the investigation internally by tracing who inside the FBI was accessing the databases. FBI agents are given individual passwords and logons to use the systems, and there are electronic trails every time they access the databases. In the aftermath of the Hanssen spy case, the agency has become much more diligent in tracking who accesses what internal computer files and why.

"Computers are a dangerous thing," noted another FBI agent familiar with the case. "You can tell who is looking at what cases. And in this case, it raised the question: Why in the hell would somebody in Albuquerque be looking at some of these cases?"

The investigators had additional suspicions raised when one of the accused Albuquerque-based agents, Mr. Royer, left the FBI last Dec. 21 to work for Mr. Elgindy . "That definitely raised some suspicions," the agent said. It was apparently around this time that Mr. Royer wrote the letter supporting Mr. Elgindy's effort to be released early from a three-year probation sentence for mail fraud in an unrelated matter, saying that Mr. Elgindy "has gone above and beyond to assist law enforcement and civil regulatory agencies." The letter adds, "His insight and technical abilities have been directly responsible for providing valuable information resulting in eight major investigations."

The letter, which isn't dated but bears a fax stamp dated Dec. 27, 2001, was included as an exhibit to a civil suit in San Diego County Superior Court between Mr. Elgindy and his former lawyer, Matthew Tyson. (Mr. Elgindy's motion to be released from probation early was denied on Jan. 31, according to the clerk's office in the federal court in Fort Worth, Texas.) A lawyer for Mr. Royer declined to comment on his client's indictment or on the letter.

After Mr. Royer left the FBI, the agency watched him, while also keeping an eye on information that was being accessed, which later led to a second FBI agent in Albuquerque, Lynn Wingate, who also was charged in the case, the agent added.

In December, Nuclear Solutions Inc., based in Meridian, Idaho, one of the companies targeted by Mr. Elgindy , complained to the FBI about his activity, according to a person familiar with the matter. Mr. Elgindy , using information passed on to him by a former FBI agent, told subscribers to his Web site that an executive at the company was a "convicted felon."

Nuclear Solutions, which had zero revenue last year and a net loss of $1.3 million, according to its annual report, was typical of the companies that Mr. Elgindy targeted. Its stock was traded for about $3.30 a share in mid-December on the OTC Bulletin Board when its shares began being shorted around Dec. 19. The stock currently fetches $1.08, and the company's total market value is about $11 million. Officials at the company didn't return calls seeking comment.

Nuclear Solutions was the only company named in the indictment as one in which Mr. Elgindy used confidential government information to try to knock down the shares. But the indictment alleges that Mr. Elgindy used confidential information on five other companies.

In addition, Mr. Elgindy had many other short-selling targets in the past. One was SeaView Video Technology Inc., a St. Petersburg, Fla., maker of underwater video cameras. SeaView had $732,000 of revenue last year and a net loss of $2.8 million. Its stock trades for 35 cents on the OTC Bulletin Board, and the company's market value is about $11 million.

SeaView said that Mr. Elgindy once called saying that he was a reporter seeking information about the company, but didn't connect him with short-selling in its stock. No evidence has been released that Mr. Elgindy's short-selling resulted from an FBI probe into the company.

Mr. Elgindy has never been one to mince words about stocks he doesn't like. On April 3, he posted a message on Silicon Investor, a popular Web site for discussing stocks, calling Golden Star Resources Ltd., a Littleton, Colo., mining company, "a complete and utter turd." It isn't clear if he sold the stock short.

The stock traded for $1.42 on the OTC Bulletin Board at the time Mr. Elgindy posted his comment, and now fetches $1.96 amid a broad rally in mining and gold-related stocks. Golden Star Resources Chief Executive Peter Bradford says he doesn't believe he has ever spoken with Mr. Elgindy , although he said it is possible the two talked by telephone. "I get calls from brokers all the time and I hang up on them," he said.

On occasion, Mr. Elgindy would target somewhat larger stocks. In late March, he told readers on Silicon Investor that Aksys Ltd. was "overvalued" and two days later he posted a report on his Web site, Insidetruth.com, about the Lincolnshire, Ill., maker of dialysis equipment. Aksys shares traded for $8.78 on the Nasdaq Stock Market at the time Mr. Elgindy made his remarks. They currently fetch $5.81, giving the company a market cap of about $147 million. Aksys Chief Executive Bill Dow says he never spoke with Mr. Elgindy and adds the report published by the trader contained inaccuracies and quoted him out of context.

Prosecutor Alleges Accused Investor May Have Known of Sept. 11 Events

By MAUREEN TKACIK
Staff Reporter of THE WALL STREET JOURNAL

SAN DIEGO -- A federal prosecutor said that Amr Elgindy , a short seller charged with conspiring with Federal Bureau of Investigation agents to make money by manipulating stocks, tried to liquidate his children's $300,000 fund on Sept. 10 and may have had prior knowledge of the Sept. 11 attacks.

In a detention hearing, Assistant U.S. Attorney Ken Breen also cited Mr. Elgindy's dual Egyptian and U.S. citizenship, his travels to the Middle East and a series of wire transfers from accounts in Canada and the U.S. to Lebanon beginning last October as reasons to suspect the investor had "prior knowledge of the Sept. 11 attacks" and was a flight risk.

Mr. Breen offered no further elaboration. The Justice Department declined to comment further, but a statement issued earlier would appear to conflict with the statement at the detention hearing on Friday. After Mr. Elgindy was charged Wednesday, an FBI official said investigators had initially begun looking into his finances as part of the terrorism investigation. A Justice official stressed on Thursday that the current investigation was a white-collar one. "He is not charged" related to terrorism, the official said. "In fact, there aren't any allegations" connecting Mr. Elgindy to Sept. 11.

Jeanne Knight, an attorney for Mr. Elgindy , dismissed Mr. Breen's accusations as "racial profiling" and said her client had been intending to liquidate his children's college fund for a week before the attacks. She said he had transferred $700,000 to accounts in Beirut, Lebanon, for the purpose of buying a condominium in the country. "My client is a capitalist. He doesn't want to live in a Third World country, he wants a summer home there," Ms. Knight said.

Mr. Elgindy , 34 years old, a Muslim who was born in Egypt but moved to Chicago at the age of two or three, was held without bond on charges of racketeering, extortion and obstruction of justice. But Judge John Houston emphasized in his judgment that he had disregarded Mr. Breen's "inferences" about the short seller's ties to Sept. 11.

Mr. Elgindy , along with a current and a former FBI agent and two others, was charged with using confidential government data in a short-selling scheme that profited by spreading unfavorable information to drive stock prices down or to extort free or cheap stock from companies. Short sellers seek to turn a profit by selling borrowed shares and then buying back the shares at a lower price if the stock falls, and pocketing the difference.

Accusations that Mr. Elgindy knew about and profited from the terrorist attacks have for months swirled around stock-market message boards on the Internet. A well-known trader and commentator known for knocking down stocks, Mr. Elgindy boasts a devoted following and a number of enemies. In 1999, he and a business partner took a charity mission to Kosovo, where some of his estranged associates have claimed he made anti-American statements and expressed sympathy with Osama bin Laden. Until Friday's hearing, however, no federal authorities had given credence to any of the accusations.

Subscribe to WSJ Online @ http://www.wsj.com

.....Jen

-- posted by Jen_

http://www.signonsandiego.com/news/union...

Top 171. Jun 10, 2002 10:07 AM

» Kirk - FROM PARTNER TO PROFITEER

.
This is the writer that interviewed me for the story. I was not quoted. He seems to be pretty balanced and is not convicting Anthony before he is proven guilty. Of course, Elgindy is a local boy in San Diego...

FROM PARTNER TO PROFITEER

Local stock speculator is accused of bribing FBI agents for information on companies

By Dean Calbreath
STAFF WRITER

June 10, 2002

When local stock speculator Amr "Anthony" Elgindy first dealt with the FBI, it was as an informant – wearing body wires, using tapped phones and collecting boxloads of evidence in an effort to stay out of jail.

Elgindy's reluctant partnership with the FBI soon blossomed into a profitable relationship. He told the feds about wrongdoing at companies and then made money by betting that the resulting investigations would push the stock prices down.

Now Elgindy faces charges that his relationship with the FBI got too close. He is slated to be extradited to New York this week on charges that he bribed two FBI agents to gain negative information about the companies he was betting against.

His case offers a glimpse into the wobbly companies on the lower rungs of the stock market, the speculators who try to profit from those companies' downfall, and the government watchdogs whose informants often have mixed motives for attacking corporate wrongdoers.

Elgindy, 34, portrays himself as a reformed scam artist, a white knight battling corporate fraud. Others call him a brash, arrogant wheeler-dealer with a sharp tongue, a volatile temper and a penchant for cutting corners to get his way.

During the past several years, he became one of the country's most prominent short-sellers, with a Web site dedicated to purveying damaging information about the companies he was shorting.

But he started out on the other side, as a broker who was trying to pump up worthless stock rather than knock it down.

After a stunted education at the University of Southern California and San Diego State University, Elgindy started peddling stock in 1988 at Blinder, Robinson & Co., which was then being investigated by the Securities and Exchange Commission for foisting shoddy stocks onto unsuspecting investors. When client lawsuits forced Blinder into bankruptcy in 1992, Elgindy, just 24 at the time, migrated to other firms, often drawing complaints from clients who said he misused their money.

In legal proceedings, some clients accused him of making unauthorized purchases, lying about their portfolios or making unnecessary trades to boost his sales commissions. Elgindy's mother told the National Association of Securities Dealers that he had made unauthorized trades in her pension account. She won $30,000 in arbitration in 1992.

Elgindy's high-pressure stock-selling techniques were echoed in his private life. In October 1989, Mary Faith Lumpkin went so far as to seek a court order to force Elgindy to stop harassing her.

"He does not give up. He will call me at home, at work. He will follow me. He will have his friends follow and call me," Lumpkin complained, adding that she feared he might turn violent.

Not long after the filing, Lumpkin married Elgindy. They now have three children. But some of Elgindy's other relationships have not been resolved so well.

Last month, Elgindy was ordered to pay $155,000 to his former attorney Matthew Tyson for libel and infliction of emotional distress. In a bitter feud, Elgindy slammed Tyson on the Web in racially tinged attacks. He offered Tyson's employer $100,000 to fire him.

"He threatened to hunt me down and to somehow strike me with his shoes, with his foot, and made some threat about hanging me by (an anatomical location)," Tyson said.

San Diego Superior Court Judge William R. Nevitt ruled that Tyson was not blameless in the dispute, because he let his own business interests conflict with Elgindy's, even while serving as his attorney. But Nevitt added that this could not excuse Elgindy for his self-described "campaign to 'destroy' Tyson and make his life 'a living hell.' "

Elgindy's career path took a hairpin turn in 1995, when he became the target of a federal sweep of local brokers. To avoid trial, Elgindy spent 16 months as an FBI informant. His chief target was his then-employer, Melvin Lloyd Richards, who was making money by peddling worthless stocks through a network of boiler-room brokerages.

Elgindy's testimony was key to the government's successful campaign to put Richards and several associates in jail. Assistant U.S. Attorney Jasmine Saide wrote that "the government could not have made its cases" without his help.

After the Richards case, Elgindy discovered there was money to be made by ferreting out other Richards-style scam operators – stock promoters who hype untested technologies or inflate corporate profit figures to push the stock prices of poorly performing companies to sky-high levels.

Elgindy's plan was to find overhyped stocks and short them. To short a stock, an investor borrows shares and immediately sells them, expecting to replace them at a lower price later, betting that the price will go down.

But Elgindy was not content to wait for prices to go down. His idea was to force them down through coordinated attacks with other short-sellers. So he launched a Web site and e-mail list, where he slammed companies in often scatological terms, poking holes in their financial statements and overoptimistic press releases.

Short-sellers paid $600 per month to belong to his e-mail list. An even wider audience followed his attacks in Internet chat rooms.

"His reports taught investors how to spot stock scams and loser investments," said Mary Cummins, who dabbles in the stock market in Los Angeles. "I learned how to do proper due diligence by reading his reports. I learned how to check out management and the company's supposed claims."

Elgindy soon developed a reputation as the king of the short-sellers. His short-selling – together with the money generated by his subscriptions – helped pay for his $2.2 million mansion in Encinitas and his Humvee, Ferrari, Bentley and Jaguar.

Elgindy employed a variety of questionable techniques to obtain information on the companies he was targeting.

When preparing for an attack on SulphCo, a petroleum desulfurization lab in Reno, Nev., Elgindy visited the company and allegedly gave his name as Tony Carponus, saying he was a potential investor willing to plunk down $3 million if he could review its financial data and tour the plant.

In a scathing Web diatribe after his visit, Elgindy attacked SulphCo's technology, executives and financial projections. He suggested that its equipment was patched together with aluminum foil. He noted that the chief financial officer once headed a company that collapsed as a Ponzi scheme. He said founder Rudy Gunnerman had a record of drawing investors to companies whose products never succeeded on the marketplace.

SulphCo, which sued Elgindy for fraud, refuses to discuss the charges. In a court filing, Gunnerman rebutted some allegations, but left others undisputed. An SEC staff report recently accused the company of violating securities laws, which is often a preliminary step toward an indictment.

The SEC declined to comment on whether it uses Elgindy as a source in its investigations. But SEC indictments often follow his attacks.

"I have provided information on dozens and dozens of companies that were either scams or had suspect activity surrounding them," Elgindy wrote in a letter last week to The San Diego Union-Tribune from his cell in the federal prison in downtown San Diego.

The question facing federal prosecutors is whether federal agents were providing Elgindy similar information. The indictment handed down last week states that one of Elgindy's subscribers paid $31,425 for criminal records from an FBI agent, which Elgindy then used to slam the companies where the executives worked.

Elgindy denies that. "I have never paid any FBI agent or any government agent for any information ever," he wrote.

But Elgindy's penchant for feeding tips to government agencies has long led critics to wonder if he receives tips in return.

"Have any of you believers ever wondered how he gets his inside information?" an online critic who uses the name Walter wrote in 1999. "Have you called the SEC to learn if he's really a witness, or is he more likely to have a few very fertile plants in that environment? Does he really know what's going to happen, or does he make it happen?"

That's a question a federal jury is probably going to have to answer.

-- posted by Kirk