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Prosecutor: White House advisor Karl Rove did not influence prosecution in stock case

NEW YORK &

Presidential adviser Karl Rove had nothing to do with the prosecution of a man accused of manipulating stock prices, a prosecutor says, disputing the man's claims that Rove set off probes to retaliate for a flood of spam e-mails to President Bush.

In papers submitted to a judge Friday, Assistant U.S. Attorney David M. Siegal said the criminal case against Robert McAllister was started three days before the e-mails were sent in January 2005.

The investigation began when a staff accountant at the Securities and Exchange Commission was told McAllister had made telephone threats against a stock promoter related to McAllister's events promotion company, Millennium National Events Inc., Siegal said.

McAllister's lawyer, Gerald L. Shargel, said last month he hoped to call Rove as a witness to support a claim that Rove "used his power and influence at the White House to seek quick punishment of Millennium, and therefore also Robert McAllister, for daring to spam the president's personal Web site."

Shargel said McAllister's efforts to grow his company were "thwarted by the wrongful conduct of stock promoters," one of whom sent spam e-mails to the Bush Web site, http:georgewbush.com/, which automatically reconnects to the Republican National Committee, http:www.gop.com/.

The Daily News reported last month that e-mails, phone records and transcripts of phone conversations show Rove contacted McAllister and at least three stock promoters.

Siegal told the judge that Rove did not wield the prosecutor's office "as his personal sword." He cited the careful manner in which the case progressed and written declarations by three government investigators saying Rover never communicated with them.

"This is nonsense, and the myriad claims the defendant makes are all either false, irrelevant or both," he said.

The government says McAllister, of Jupiter, Fla., was already on their radar screen because the FBI in early 2002 investigated his involvement in a scheme to fraudulently manipulate trading in another company.

McAllister was not arrested then, but the FBI recorded him talking to a cooperating government witness about allegedly bribing stock brokers in the plot to manipulate the company's stock, the government said in court papers.

The 2002 recordings are among evidence described in a July indictment charging McAllister with conspiracy to commit securities fraud, wire fraud and mail fraud. There was no indication when the case would go to trial.

If convicted, McAllister could face up to 65 years in prison. Three others in the case have pleaded guilty in the last two weeks and are awaiting sentencing. McAllister is free on $500,000 bail.

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