Wall Street Journal|
May 28, 2002
Prosecutor Suspects Investor Knew Attacks Would Happen
by Maureen Tkacik
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 judgement 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 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.