part2
41. In furtherance of the conspiracy and to effect the
objectives thereof, the defendants AMR I. ELGINDY, JEFFREY A.
ROYER, DERRICK W. CLEVELAND, TROY M. PETERS and LYNN WINGATE, and
their coconspirators committed and caused to be committed the
following:
OVERT ACTS
Payments to ROYER
a. On or about November 28, 2000, the defendant
DERRICK W. CLEVELAND wired $8,500.00 to the account of the
defendant JEFFREY A. ROYER.
b. On or about January 30, 2001, the defendant
DERRICK W. CLEVELAND wired $5,000.00 to the account of the
defendant JEFFREY A. ROYER.
c. On or about May 22, 2001, the defendant
DERRICK W. CLEVELAND wired $9,925.00 to the account of the
defendant JEFFREY A. ROYER.
d. On or about May 31, 2001, the defendant
DERRICK W. CLEVELAND wired $7,000.00 to the account of the
defendant JEFFREY A. ROYER.
18
Company No. 1
e. On or about December 15, 2000, the defendant
AMR I. ELGINDY short sold the stock of a company listed on the
Over the Counter Bulletin Board ("Company No. 1").
f. On January 2, 2001, the defendant JEFFREY A.
ROYER searched the NCIC database and found criminal history
information regarding the president of Company No. 1.
g. On January 3, 2001, the defendant AMR I.
ELGINDY issued a research report regarding Company No. 1, which
disclosed its president's criminal history.
h. On or about January 8, 2001, the defendant
AMR I. ELGINDY short sold the stock of Company No. 1.
Company No. 2
i. On or about August 9, 2001, the defendant
JEFFREY A. ROYER searched the ACS database and accessed nonpublic
information concerning another company listed on the Over the
Counter Bulletin Board ("Company No. 2").
j. On or about August 17, 2001, the defendant
DERRICK W. CLEVELAND short sold the stock of Company No. 2.
k. On or about August 21, 2001, the defendant
AMR I. ELGINDY short sold the stock of Company No. 2.
Company No. 3
l. On or about August 11, 2001, the defendant
JEFFREY A. ROYER searched the ACS database and accessed nonpublic
19
information concerning another company listed on the Over the
Counter Bulletin Board ("Company No. 3").
m. On or about August 14, 2001, the defendant
DERRICK W. CLEVELAND short sold the stock of Company No. 3.
Company No. 4
n. On or about September 19, 2001, the defendant
JEFFREY A. ROYER searched the ACS database and accessed nonpublic
information concerning another company listed on the Over the
Counter Bulletin Board ("Company No. 4") in this regard.
o. On or about September 20, 2001, the defendant
AMR I. ELGINDY short sold the stock of Company No. 4.
Nuclear Solutions
p. On December 19, 2001, at approximately 11:19
a.m. (Eastern Standard Time), the defendant JEFFREY A. ROYER
searched the NCIC database and found criminal history information
regarding Paul Brown, the founder of Nuclear Solutions, a company
listed on the Over the Counter Bulletin Board.
q. On December 19, 2001, at approximately 1:31
p.m. (Eastern Standard Time), the defendant AMR I. ELGINDY sent
an e-mail to his subscribers that stated: "NSOL - CEO, Dr. Paul
Maurice Brown, is a convicted felon ..."
r. On or about December 20, 2001 the defendant
AMR I. ELGINDY and others, began posting information regarding
20
Paul Brown’s alleged criminal record on Internet bulletin boards
and chat rooms.
Company No. 5
s. On or about March 4, 2002, the defendant LYNN
WINGATE searched the ACS database and accessed nonpublic
information concerning the Chief Executive Officer of a company
listed on the NASDAQ National Market System ("Company No. 5").
t. On or about March 4, 2002, after the
defendant LYNN WINGATE’s ACS search described in overt act (s),
WINGATE telephoned the defendant JEFFREY A. ROYER.
B. Securities Fraud Conspiracy - Market Manipulation
42. The allegations contained in paragraphs 1 through
32 and 37 through 41 are realleged and incorporated as if fully
set forth herein.
43. In or about and between November 2000 and May
2002, both dates being approximate and inclusive, the defendants
AMR I. ELGINDY, also known as “Tony Elgindy” and “Anthony
Pacific,” JEFFREY A. ROYER, DERRICK W. CLEVELAND, TROY M. PETERS
and LYNN WINGATE, together with others, did knowingly and
willfully conspire to use and employ manipulative and deceptive
devices and contrivances directly and indirectly, by use of means
and instrumentalities of interstate commerce and the mails, in
contravention of Rule 10b-5 of the Rules and Regulations of the
United States Securities and Exchange Commission (Title 17, Code
21
of Federal Regulations, Section 240.10b-5), and directly and
indirectly to (a) employ devices, schemes and artifices to
defraud; (b) make untrue statements of material facts and omit to
state material facts necessary in order to make the statements
made, in light of the circumstances under which they were made,
not misleading; and (c) engage in acts, practices and a course of
business which would and did operate as a fraud and deceit upon
members of the investing public, in connection with purchases and
sales of various securities, in violation of Title 15, United
States Code, Sections 78j(b) and 78ff, all in violation of Title
18, United States Code, Section 371.
44. It was a part of the conspiracy that between
November 2000 to May 2002, both dates being approximate and
inclusive, the defendants AMR I. ELGINDY, DERRICK W. CLEVELAND
and JEFFREY A. ROYER, together with others, devised, implemented
and oversaw a fraudulent scheme to deflate artificially the price
of various companies’ stock that they had short sold and then to
profit by buying it back later at a lower price. ELGINDY,
CLEVELAND, ROYER and others sought to accomplish their
manipulation by coordinating the release of negative information
with short selling in a manner designed to exaggerate the
negative market sentiment for the stock.
45. It was further part of the conspiracy that the
AnthonyPacific.com subscribers received the information and
22
recommendations first, so that they could position themselves to
profit if the market reacted to the exaggerated negative market
sentiment for the stocks, and so that a portion of their profits
would be paid back to the defendants AMR I. ELGINDY in the form
of subscription fees.
46. In furtherance of the conspiracy and to effect the
objectives thereof, the defendants AMR I. ELGINDY, DERRICK W.
CLEVELAND and JEFFREY A. ROYER, and their coconspirators
committed and caused to be committed the following:
OVERT ACTS
a. On December 19, 2001, at approximately 11:19
a.m. (Eastern Standard Time), the defendant JEFFREY A. ROYER
searched the NCIC database and found criminal history information
regarding Paul Brown, the founder of Nuclear Solutions, one of
the Targeted Companies.
b. On December 19, 2001, at approximately 1:31
p.m. (Eastern Standard Time), the defendant AMR I. ELGINDY sent
an e-mail to his subscribers that stated: "NSOL - CEO, Dr. Paul
Maurice Brown, is a convicted felon ..."
c. On or about December 20, 2002, the defendant
AMR I. ELGINDY and others, began posting information regarding
Paul Brown’s alleged criminal record on Internet bulletin boards
and chat rooms.
23
d. On December 22, 2001, the defendant AMR I.
ELGINDY sent an e-mail to his subscribers that stated: "Convicted
Felon Brown ... has history of lying & fraud..."
e. On or about December 24, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
f. On December 26, 2001,the defendant AMR I.
ELGINDY sent an e-mail to his subscribers that stated: "NSOL -
info on [a Nuclear Solutions executive] the scumbag [attorney]
... has been disbarred..."
g. On or about December 27, 2001, the defendant
AMR I. ELGINDY sent an e-mail to his subscribers that stated:
"NSOL -- if u are short you need to [private message] me how
many."
h. On or about January 2, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
i. On or about January 3, 2002, the defendant
AMR I. ELGINDY sent an e-mail to his subscribers that stated:
"NSOL -- short 20% @ 2.05 (add).
j. On or about January 3, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
k. On or about January 9, 2001, the defendant
DERRICK W. CLEVELAND short sold the stock of Nuclear Solutions.
l. On or about January 16, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
24
m. On or about January 24, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
n. On or about January 25, 2001, the defendant
AMR I. ELGINDY short sold the stock of Nuclear Solutions.
o. On or about January 30, 2002, the defendant
AMR I. ELGINDY in a chat room discussion with his subscribers,
stated "We are pulling out of NSOL" and "NSOL <--- coverage
[terminated] for good."
Racketeering Act Two
(Extortion)
47. The defendants AMR I. ELGINDY, JEFFREY A. ROYER,
DERRICK W. CLEVELAND and TROY M. PETERS, and other members and
associates, committed the following acts involving extortion, any
one of which alone constitutes the commission of Racketeering Act
Two.
A. Extortion Conspiracy
48. The allegations contained in paragraphs 1 through
32, 37 through 41 and 44 through 46 are realleged and
incorporated as if fully set forth herein.
49. In or about and between December 2001 and February
2002, both dates being approximate and inclusive, the defendants
AMR I. ELGINDY, also known as “Tony Elgindy” and “Anthony
Pacific,” JEFFREY A. ROYER, DERRICK W. CLEVELAND and TROY M.
PETERS, and others, did knowingly and intentionally conspire to
obstruct, delay and affect commerce, and the movement of articles
25
and commodities in commerce, by extortion, as that term is
defined in Title 18, United States Code, Section 1951(b)(2), in
that the defendants and others conspired to obtain, through
extortionate demands, property, to wit, stock, with the consent
of the owner of such stock, which consent was to be induced by
the wrongful use of actual and threatened force, violence and
fear.
B. Extortion
50. The allegations contained in paragraphs 1 through
32, 37 through 41 and 44 through 46 are realleged and
incorporated as if fully set forth herein.
51. In or about and between December 2001 and February
2002, both dates being approximate and inclusive, the defendants
AMR I. ELGINDY, also known as “Tony Elgindy” and “Anthony
Pacific,” JEFFREY A. ROYER, DERRICK W. CLEVELAND and TROY M.
PETERS, and others, did knowingly and intentionally obstruct,
delay and affect commerce, and the movement of articles and
commodities in commerce, by extortion, as that term is defined in
Title 18, United States Code, Section 1951(b)(2), in that the
defendants and others obtained, through extortionate demands,
property, to wit, stock, with the consent of the owner of such
stock, which consent was to be induced by the wrongful use of
actual and threatened force, violence and fear.
26
Racketeering Act Three
(Obstruction of Justice)
52. The allegations contained in paragraphs 1 through
32, 37 through 41 and 44 through 46 are realleged and
incorporated as if fully set forth herein.
53. In or about and between October 2001 and May 2002,
both dates being approximate and inclusive, the defendants AMR I.
ELGINDY, also known as “Tony Elgindy” and “Anthony Pacific,”
JEFFREY A. ROYER and LYNN WINGATE, together with others, did
knowingly, intentionally and corruptly endeavor to influence,
obstruct and impede the due administration of justice with
respect to matters before a grand jury in the Eastern District of
New York and elsewhere, by ROYER and WINGATE accessing a
confidential FBI database to gain information concerning the EDNY
Grand Jury Investigation to provide it to ELGINDY and others, in
violation of Title 18, United States Code, Section 1503.
(Title 18, United States Code, Sections 1962(d), 1963
and 3551 et seq.)
COUNT TWO
(Securities Fraud Conspiracy - Insider Trading)
54. The allegations contained in paragraphs 1 through
32, 37 through 41 and 44 through 46 are realleged and
incorporated as if fully set forth herein.
55. In or about and between November 2000 and May
2002, both dates being approximate and inclusive, within the
27
Eastern District of New York and elsewhere, the defendants AMR I.
ELGINDY, also known as “Tony Elgindy” and “Anthony Pacific,”
JEFFREY A. ROYER, DERRICK W. CLEVELAND, TROY M. PETERS and LYNN
WINGATE, together with others, did knowingly and willfully
conspire to use and employ manipulative and deceptive devices and
contrivances directly and indirectly, by use of means and
instrumentalities of interstate commerce and the mails, in
contravention of Rule 10b-5 of the Rules and Regulations of the
United States Securities and Exchange Commission (Title 17, Code
of Federal Regulations, Section 240.10b-5), and directly and
indirectly to (a) employ devices, schemes and artifices to
defraud; (b) make untrue statements of material facts and omit to
state material facts necessary in order to make the statements
made, in light of the circumstances under which they were made,
not misleading; and (c) engage in acts, practices and a course of
business which would and did operate as a fraud and deceit upon
members of the investing public, in connection with purchases and
sales of securities, in violation of Title 15, United States
Code, Sections 78j(b) and 78ff.
56. It was a part of the conspiracy that between
November 2000 to May 2002, both dates being approximate and
inclusive, the defendants AMR I. ELGINDY and DERRICK W.
CLEVELAND, solicited, obtained and received from the defendant
JEFFREY A. ROYER, and, later, ELGINDY, CLEVELAND and ROYER,
28
solicited, obtained and received from the defendant LYNN WINGATE
material, non-public information concerning Targeted Companies
which they then used to make decisions whether to purchase and
sell the stocks of the Targeted Companies.
(Title 18, United States Code, Section 371).
COUNT THREE
(Securities Fraud Conspiracy - Market Manipulation)
57. The allegations contained in paragraphs 1 through
32, 37 through 41, 44 through 46 and 56 are realleged and
incorporated as if fully set forth herein.
58. In or about and between November 2000 and May
2002, both dates being approximate and inclusive, within the
Eastern District of New York and elsewhere, the defendants AMR I.
ELGINDY, also known as “Tony Elgindy” and “Anthony Pacific,”
JEFFREY A. ROYER, DERRICK W. CLEVELAND, TROY M. PETERS and LYNN
WINGATE, together with others, did knowingly and willfully
conspire to use and employ manipulative and deceptive devices and
contrivances directly and indirectly, by use of means and
instrumentalities of interstate commerce and the mails, in
contravention of Rule 10b-5 of the Rules and Regulations of the
United States Securities and Exchange Commission (Title 17, Code
of Federal Regulations, Section 240.10b-5), and directly and
indirectly to (a) employ devices, schemes and artifices to
defraud; (b) make untrue statements of material facts and omit to
state material facts necessary in order to make the statements
29
made, in light of the circumstances under which they were made,
not misleading; and (c) engage in acts, practices and a course of
business which would and did operate as a fraud and deceit upon
members of the investing public, in connection with purchases and
sales of securities, in violation of Title 15, United States
Code, Sections 78j(b) and 78ff.
59. It was a part of the conspiracy that between
November 2000 to May 2002, both dates being approximate and
inclusive, the defendants AMR I. ELGINDY, DERRICK W. CLEVELAND
and JEFFREY A. ROYER, together with others, devised, implemented
and oversaw a fraudulent scheme to deflate artificially the price
of various companies’ stock that they had short sold and then to
profit by buying it back later at a lower price for return to the
lender.
(Title 18, United States Code, Section 371).
COUNT FOUR
(Extortion Conspiracy)
60. The allegations contained in paragraphs 1 through
32, 37 through 41, 44 through 46, 56 and 59 are realleged and
incorporated as if fully set forth herein.
61. In or about and between December 2001 and February
2002, both dates being approximate and inclusive, the defendants
AMR I. ELGINDY, also known as “Tony Elgindy” and “Anthony
Pacific,” JEFFREY A. ROYER, DERRICK W. CLEVELAND and TROY M.
PETERS, and others, did knowingly and intentionally conspire to
30
obstruct, delay and affect, commerce, and the movement of
articles and commodities in commerce, by extortion, as that term
is defined in Title 18, United States Code, Section 1951(b)(2),
in that the defendants and others conspired to obtain, through
extortionate demands, property, to wit, stock, with the consent
of the owner of such stock, which consent was to be induced by
the wrongful use of actual and threatened force, violence and
fear.
(Title 18, United States Code, Sections 1951(a)).
COUNT FIVE
(Obstruction of Justice Conspiracy)
62. The allegations contained in paragraphs 1 through
32, 37 through 41, 44 through 46, 56, 59 and 64 are realleged and
incorporated as if fully set forth herein.
63. In or about and between October 2001 and May 2002,
both dates being approximate and inclusive, within the Eastern
District of New York and elsewhere, the defendants AMR I.
ELGINDY, also known as “Tony Elgindy” and “Anthony Pacific,”
JEFFREY A. ROYER and LYNN WINGATE, together with others, did
conspire to knowingly, intentionally and corruptly endeavor to
influence, obstruct and impede the due administration of justice
with respect to matters before a grand jury in the Eastern
District of New York and elsewhere, by ROYER and WINGATE
accessing a confidential FBI database to gain information
31
concerning the investigation to provide it to ELGINDY, in
violation of Title 18, United States Code, Section 1503.
64. In furtherance of the conspiracy, and for the
purpose of effecting the objectives thereof, within the Eastern
District of New York and elsewhere, the defendants AMR I.
ELGINDY, JEFFREY A. ROYER and LYNN WINGATE, and their
coconspirators committed and caused to be committed, among
others, the following:
OVERT ACTS
a. On or about October 4, 2001, the defendant
JEFFREY A. ROYER searched the ACS database for references to
"Elgindy" and an individual associated with the defendant AMR I.
ELGINDY.
b. On or about October 12, 2001, the defendant
JEFFREY A. ROYER searched the ACS database for references to
"Elgindy, Anthony."
c. On or about October 17, 2001, the defendant
JEFFREY A. ROYER searched the ACS database for references to
"Elgindy" and "Royer, Jeff."
d. On or about October 20, 2001, the defendant
JEFFREY A. ROYER searched the ACS database for references to
"Elgindy, Anthony" and an individual associated with the
defendant AMR I. ELGINDY.
32
e. On or about October 30, 2001, the defendant
JEFFREY A. ROYER searched the ACS database for references to
"Elgindy, Anthony."
f. On or about November 6, 2001, the defendant
JEFFREY A. ROYER searched the ACS database for references to
"Royer" and "Royer, J."
g. On or about November 7, 2001, the defendant
JEFFREY A. ROYER searched the ACS database for references to
"Elgindy, Anthony."
h. On or about April 18, 2002, the defendant LYNN
WINGATE searched the ACS database for references to "Elgindy" and
"Royer."
i. On or about April 18, 2002, after searching
the ACS database for references to "Elgindy, Anthony" and "Royer,
Jeff," the defendant LYNN WINGATE telephoned the defendant
JEFFREY A. ROYER.
j. On or about April 18, 2002, the defendant
JEFFREY A. ROYER telephoned the defendant AMR I. ELGINDY.
k. On or about April 23, 2002, the defendant LYNN
WINGATE searched the ACS database for references to "Wingate."
l. On or about April 23, 2002, the defendant
JEFFREY A. ROYER telephoned the defendant AMR I. ELGINDY.
(Title 18, United States Code, Section 371).
33
COUNT SIX
(Obstruction of Justice)
65. The allegations contained in paragraphs 1 through
32, 37 through 41, 44 through 46, 56, 59 and 64 are realleged and
incorporated as if fully set forth herein.
66. In or about and between October 2001 and May 2002,
both dates being approximate and inclusive, within the Eastern
District of New York and elsewhere, the defendants AMR I.
ELGINDY, also known as “Tony Elgindy” and “Anthony Pacific,”
JEFFREY A. ROYER and LYNN WINGATE, together with others, did
knowingly, intentionally and corruptly influence, obstruct and
impede, and endeavor to influence, obstruct and impede, the due
administration of justice with respect to matters before a grand
jury in the Eastern District of New York and elsewhere.
(Title 18, United States Code, Section 1503).
A TRUE BILL
FOREPERSON
ALAN VINEGRAD
UNITED STATES ATTORNEY
EASTERN DISTRICT OF NEW YORK
