Trader Courted Attention,
Profile: Amr Elgindy, accused of stealing secret
FBI data, led a flashy lifestyle. Some
call him a savior; others, a
E. Scott Reckard
Los Angeles Times
June 3, 2002
Showing off a Ferrari and an
in-your-face attitude, Amr I. "Anthony" Elgindy peered
out of America's
TV sets in May 1997 to warn that small investors "haven't got a
mobsters and con artists he said were using bribes and beatings to
force Wall Street brokers to promote worthless stocks to their clients.
"That's not going to happen to me," the Cairo-born stockbroker with the
build told Brian
Ross of ABC's "20/20." Saying a bullet inscribed with his name had
arrived in the mail, Elgindy displayed a Colt pistol and a tape recorder--describing
them as his weapons to help authorities battle this empire of corruption.
though, it is Elgindy who is the target of corruption allegations. Arrested
May 22 at his
Encinitas office and now being held without bail in San Diego's
Metropolitan Correctional Center, he faces extradition to New York, accused of
stealing secrets from federal criminal databases with help from FBI agents and then
using the information to reap profits in the stock market. Elgindy, 34, who contends
he's the victim of double-dealing associates and vindictive regulators, is
by neighbors and business associates as a man of outsized charm, with an arrogant
streak and a craving for attention. During a controversial career in the
business, Elgindy has been an FBI informant, the defendant in a securities
claim filed by his own mother--and now a defendant in a stock-manipulation case
drawing national attention.
an indictment handed up by a New York grand jury, Elgindy and
associates, including one former and one current FBI agent, used
confidential material from FBI files to shake down companies under federal
scrutiny or to profit by betting their stock prices would fall. He is
racketeering, fraud, extortion and obstruction of justice.
Moreover, Assistant U.S. Atty. Ken Breen said at a May 24 bail hearing
federal court in San Diego that Elgindy might have had advance warning of
Sept. 11 terrorist attacks--a charge his lawyer called "racial
profiling" and one
Elgindy calls "very, very sleazy."
In a telephone
interview from jail over the weekend, he contended that the
questions were raised only because "of my birthplace, my name, the
By his own estimate, Elgindy has made a fortune over the years
short, the legal but oft-reviled strategy of selling borrowed
shares in hopes of
making a profit by buying them back cheaper should the
Indeed, his use of Internet sites--which charged
subscribers up to $600 a
month--to trumpet the flaws of his targeted
companies made him one of the
best-known short sellers in recent years, what
Wired magazine called "the Mad
Max of Wall Street."
celebrated case, he urged investors to sell K-tel International Inc. after
the stock soared from $5 to $30 in April and May 1998 on optimism about a
plan to sell the company's greatest-hit recordings over the Internet. He was
right: K-tel shares quickly plunged and were back to $6 by August 1998.
Elgindy says all of the material he used to target stocks--including
criminal investigations of executives allegedly stolen from FBI
gathered from legitimate sources.
I've discovered I've discovered publicly," he said Saturday.
If, as he
says, Elgindy is the victim of regulators, acquaintances and
offended by his outspokenness, the public record provides clues
hostility: a long trail of lawsuits, embittered former associates, criminal
investigations and convictions, and disputes with the National Assn. of
Securities Dealers while at brokerages in San Diego and Texas.
Elgindy, whose family moved from Egypt to the Chicago area when he was
studied briefly at the University of Southern California, worked as a car
salesman in San Diego, then gravitated to the more lucrative brokerage
His first such job in 1988 was with the notorious "penny
stock" firm Blinder,
Robinson & Co. He maintains he left the
firm--nicknamed "blind 'em and rob
'em" by burned investors--after learning
it specialized in promoting worthless
contended that exposure to unsavory practices at Blinder and at other
brokerages paved the way for him to become an informant for the
and Exchange Commission, the FBI and other federal agencies. "I
the government hundreds if not thousands of tips on Wall Street
Elgindy said he became an informant in 1994 in return for
prosecution for his role in a stock-promotion kickback case.
deal was made public in May 2000 as he was sentenced to four
prison after pleading guilty to insurance fraud.
sentencing hearing in Fort Worth, strikingly divergent portraits emerged
Elgindy. His wife, Mary Faith, the daughter of a Tennessee Baptist minister,
said her husband was a devoted father to their three sons, the oldest of
has attention deficit disorder and Tourette's syndrome. Other defense
described Elgindy as an outright savior to dozens of Kosovo
saying he raised more than $48,000, helped them move to
provided housing, cars and clothing after they arrived.
Prosecutors, however, portrayed Elgindy as a repeated liar who, they
may have pocketed some donations intended for the victims of Kosovo
Elgindy also has had several run-ins with securities
regulators. In a 1992
NASD arbitration action, Elgindy's mother,
anesthesiologist Laila I. Gomaa,
accused Elgindy and his AMR Securities Inc.
of making unauthorized trades in
her pension account. She ultimately was
In 1997, NASD censured and fined him $30,000 for
violations of securities rules. A year later, NASD records
show, the group
revoked his registration for failing to pay a fine and
barred him from the
brokerage business, although Elgindy says he resigned
from the NASD in
protest over mistreatment.
In his latest and most
serious predicament, Elgindy categorically denies
explanations for charges in the indictment, such as
$30,425 to then-FBI agent Jeffrey A. Royer in exchange for
also responded to the government's questions about whether
foreknowledge of the Sept.11 attacks and about his later wiring of a
sum to Lebanon.
The payments to Royer allegedly were made by Derrick W.
identified in the indictment as a short seller "who assisted"
Elgindy. But Elgindy
said he was never involved in any payments that may
have been made and
described Cleveland as just a subscriber who was never on
"It was my understanding that they [Cleveland and Royer]
friends," said Elgindy, suggesting the funds Cleveland allegedly
the FBI agent might have been intended to help Royer pay
As for the issue of advance knowledge of Sept. 11, Elgindy
sending at least $600,000 to Lebanon during the fall. He said
he wanted his
sons to spend several months a year in the Middle East to stay
in touch with
their heritage, and he transferred the funds so he could set
up an office and buy
a car and a seaside condo in Lebanon for the family to
use on those visits.
Elgindy also acknowledged having made large bets
that stocks would decline
around the time of the attacks. But as a longtime
short seller, he said it was
typical for him to have large short positions,
and that none of his short positions
were in stocks that would have been
particularly affected by the attacks, such
as online travel agencies or
securities tied to New York real estate.
Bill Muller of the U.S.
attorney's office in Brooklyn, which brought the case,
declined to comment
on Elgindy's statements.
While Elgindy sits in jail awaiting a Thursday
extradition hearing, flags of the
United States, California and Egypt still
fly at Elgindy's estate in Encinitas' rural
Olivenhain district, which the
Elgindys bought last year for $2.2million, taking
on a $1.5-million
mortgage, San Diego County property records show.
The estate includes an
elaborate faux-rock pool that he told his Internet
$300,000--part of a lifestyle that featured sumptuous parties
and a circle
of acquaintances that, according to a published report, included
Troyer, Dr. Evil's diminutive clone Mini-Me in "Austin Powers:
The Spy Who
On May 22, a Wednesday, Elgindy's neighbors watched
authorities truck away
a Bentley, a Ferrari, a Jaguar, a Humvee and a limo
as suspected ill-gotten
gains. Just the previous Saturday night, Elgindy had
thrown a party to celebrate
the completion of his