Feds: Ex-Agent Had Key Data

Stock scam charges have eerie link

By Anthony M. DeStefano

STAFF WRITER

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 (c) 2002, Newsday, Inc.

This article originally appeared at:

www.newsday.com/news/local/newyork/ny-nyfeds292724422may29.story

A former FBI agent indicted on insider trading charges was ordered jailed again Thursday after a federal judge learned that he contacted a former girlfriend and potential witness in the case.

The $500,000 bail of Jeffrey Royer was revoked by Brooklyn federal judge Raymond Dearie after prosecutors disclosed he called and wrote a letter to ex-girlfriend Christy Sarkey.

It was only last month that Dearie, in granting bail to Royer, warned him about contacting any possible witnesses in the case.

But the day he was freed by Dearie in June, Royer wrote a letter to Sarkey in which he apologized to her and said “I don’t know what life has in store for me,” according to documents unsealed in the case.

Royer also tried to call Sarkey, who worked as a support staffer in the FBI Oklahoma City office, the records show.

The investigation also led to the arrest of Wall Street trader Amr Tony Elgindy and now suspended FBI agent Lynn Wingate.

Among various charges in the May indictment, Royer was accused of trading on confidential financial information gleaned from law enforcement investigations and passing the information to Elgindy.

Sarkey also told investigators that an agent in the New York City FBI office, as well as an agent in San Diego invested with Royer.

A former girl friend of Royer and now a police office in Oklahoma, Sarkey FBI investigators last month that she lose $4,000 in trading in a stock at Royer’s “behest” and that “other agents and perhaps some support staff personnel invested” with him “or at his behest,” according her interview summary.

Sarkey identified the two agents investing with Royer as Charles Ruiz, who works in New York and Todd Temple in San Diego, according to the interview summary.

Neither Ruiz or Temple have been charged in any wrongdoing and one law enforcement source, who asked not to be identified, said both were “not under investigation.”

But officials were seeking more information, the source said.

FBI officials could not be reached for comment Thursday.