Feds: Ex-Agent Had Key Data
Stock scam charges have eerie link
May 29, 2002
In a criminal case with a specter of the Sept. 11 terrorist attacks, prosecutors disclosed yesterday that classified information had been found during a search of possessions of a former FBI agent allegedly part of an insider trading conspiracy.
The tantalizing revelation was made by Assistant U.S. Attorney Kenneth Breen in U.S. District Court in Brooklyn during the arraignment of Lynn Wingate, who is on administrative leave from the FBI, and former agent Jeffrey Royer on charges they were involved in a stock trading racketeering conspiracy.
During arguments over whether Royer should be given bail, Breen said that the former agent posed a risk of flight, partly because of classified information about "another subject matter" that was unearthed during the execution of a search warrant of his possessions.
Royer, 39, who left the FBI in December 2001, faces charges that he obtained confidential agency material both while he was an agent and after he left and passed it on to Amr I. Elgindy. A self-styled Wall Street whistle-blower and noted short seller of stocks, Elgindy was charged Friday with being the kingpin of the conspiracy.
Breen did not elaborate in court yesterday but said the confidential data found was material Royer had no legitimate reason for having and might lead to "something more serious."
Judge Raymond Dearie indicated that prosecutors might have to make use of special court procedures reserved for classified information if they wanted to use it in opposing bail for Royer.
Royer remained free yesterday but had to wear an electronic monitoring ankle bracelet pending a hearing tomorrow. Wingate was free after posting a $100,000 bond secured by property she owns in Colorado and her parents own in Florida.
Breen also disclosed that investigators found some of the divorced Royer's property at Wingate's Albuquerque, N.M., home.
The indictment accused the defendants of running an insider trading conspiracy in which Royer allegedly leaked confidential FBI information to Elgindy who then would make trades based on the data. The indictment also charges that when Royer left the FBI, he continued to access confidential FBI files through Wingate, 34.
Elgindy, 34, was being held without bail. During a hearing in San Diego last week, Breen said that Elgindy's attempt to liquidate the trust accounts of his children on Sept. 10 might "perhaps" mean he had "pre-knowledge of the Sept. 11 attacks, and, rather than report it, he was attempting to profit from that information."
Defense attorney Jeanne G. Knight scoffed at that suggestion and said it was an attempt by the prosecution to smear Elgindy, a U.S. citizen and native of Egypt, with "terrorist innuendos."
Copyright © 2002, Newsday, Inc.
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