Russian Mafia Conspiracy on Wall Street in Media and Government - 6

Roddy Boyd, The New York Post, has just had an idea.

It’s a hunch. Yeah, he’s Roddy-Boyd-The-Post, and now he’s, “ehhhhh,” sticking his head in a garbage can. Yeah, his head is in the garbage can, and he’s just hypothesizing here, but he’s pretty sure, pretty sure, “ehhhhh” those are used - “yeah, they’re used condoms.”

And twenty of them!

It is January 2006, five months after Patrick Byrne filed a lawsuit against David Rocker and Gradient Analytics and then held a famous conference call putting Rocker at the center of a massive financial crime dubbed “The Miscreants’ Ball.” Heaps of evidence implicating these people - affidavits, testimony from victim companies, the SEC’s data - has been given to the media, but now Roddy-Boyd-The-Post is, “ehhhhh,” doing a favor for Gradient Analytics.

A couple of days ago, Donn Vickery, Gradient’s managing partner, called Roddy, who takes his marching orders from Post business editor Dan Colarusso, formerly of TheStreet.com. What Vickery needed was this: There had been a couple of private investigators parked outside of Gradient. They’d been eyeballing the place, talking to employees. Maybe Roddy could snoop around, see what he could find out.

So Roddy begins working the phones. He is, “Ehhhhh… Roddy-Boyd-the-Post, here, investigating the aggressive tactics used by Patrick Byrne and Overstock’s private investigators.”

Patrick has not sent any PIs to talk to Gradient’s employees. The investigators (eminently polite, according to some Gradient employees) are working for another company, a Canadian pharmaceutical manufacturer called Biovail. Biovail is later sued by the SEC for inflating its numbers, and perhaps it did something wrong, but there is no question that Gradient has published research about the company that is blatantly false. There is, indeed, enough of this misinformation to fill an encyclopedia, but as a very typical example, consider that Gradient claimed in a report that Biovail’s growth “slowed dramatically” at a time when it had increased by more than 35%. (Really, this is a standard Gradient “mistake.”)

Gradient is working on the Biovail case with a group of hedge fund managers, including David Rocker. Among other tricks, people working for these hedge funds have paid doctors to get them to say that Biovail bribed them to prescribe one of its drugs. These questionable bribery charges have instigated a federal investigation into Biovail and quotes from the doctors (who admit that they were paid by hedge funds to say they were bribed by Biovail) have appeared in a Wall Street Journal “Money & Investing” section story titled, “Biovail is Paying Doctors Prescribing New Heart Drug,” and in a story in Barron’s magazine, written by Bill Alpert, a close friend of Herb. (While Roddy is doing a favor for Gradient, the SEC has just subpoenaed Herb as part of its investigation into Gradient, and Alpert has just written, bizarrely, that he wishes he could get a subpoena, too, because he quoted those paid-off doctors and getting a subpoena is “terrific publicity.”)

Roddy knows about the bribed doctors and he knows about Gradient’s phony research. He knows about short-seller tactics, including the use of phantom stock. But Roddy isn’t interested in all of that. Instead, he’s doing a favor for Gradient. And now he’s got his head in a garbage can.

The garbage can is outside the home of Jerry Treppel, a Banc of America analyst whom Biovail accuses of helping disseminate Gradient’s false research with the hedge funds that are accused of driving down Biovail’s stock price.

Roddy-Boyd-The-Post has figured out that, “ehhhhh,” Treppel is more than fifty years old. Treppel is also a financial analyst who has been married for a long time.

He is more than fifty years old.

A financial analyst.

Married.

“Ehhhhhhhh.”

“Twenty condoms!?”

“This ain’t Jerry Treppel’s garbage.”

That’s when I knew I was on to something,” Roddy-Boyd-The-Post later tells me, “A fifty year old married financial analyst couldn’t, ehhhhhh - you know, he couldn’t be getting that much action. That’s how I knew that Biovail’s investigators must’ve stole the garbage and replaced it with someone else’s garbage. They were looking for stuff about Gradient. I figured it out - you know, ehhhhh, I did some real enterprise [investigative] work here. I busted them, man. Nobody helped me.”

Yes, as a favor to Gradient and its hedge fund clients, Roddy figured it all out. Then he filed the big news.

“TRASH STALKERS,” read the headline. “Biovail’s investigators… repeatedly took the trash of former Banc of America Securities analyst Jerry Treppel…”

* * * * * * * *

So now we have Roddy with his head in a garbage can, and Herb on CNBC saying there’s a conspiracy to get Herb, and Cramer vandalizing his government subpoena, and Herb’s friend Joe Nocera writing about “Overstock’s Campaign of Menace” in The New York Times, and Cramer’s former employee Jesse Eisinger comparing Patrick to “Where’s Waldo” in The Wall Street Journal, and Herb’s friend Bill Alpert saying he’d like to get a subpoena, too - for publicity.

But that’s not all — we also have a very peculiar former BusinessWeek reporter named Gary Weiss firing off friendly emails to a crooked mortgage broker and financial flimflammer who is so unambiguously bad that he sent his father to an early grave.

Deep Capture has come to possess a great number of emails between various journalists and miscreants. In one, the former BusinessWeek reporter brags to the crooked mortgage broker of influencing the contents of Nocera’s “Campaign of Menace” article in The New York Times. “This is totally my doing,” Gary writes. “Yuk. Yuk. Yuk.”

In another email, Gary recounts his successful campaign to keep a reporter named Liz Moyer from getting a job at BusinessWeek because she has written favorably of companies victimized by short-sellers. Moyer, who is now with Forbes, is one of the few journalists who have accurately described the phantom share problem.

Gary left BusinessWeek in 2004 under circumstances that remain a closely guarded secret. From January 2006 until today, his primary occupation has been to author a blog devoted entirely to badmouthing Patrick Byrne and pooh-poohing the notion that phantom stock is a problem. His arguments are not so much arguments as personal attacks. Anybody who utters the words “phantom stock” is a “crackpot” or a member of the “Baloney Brigade.”

Gary regularly suggests, meanwhile, that Overstock is some kind of fraud. He provides not a single scrap of evidence for this, but instead makes vague accusations and then instructs anyone wanting details to visit another blog - this one authored by Sam Antar, former chief financial officer of a family-owned electronics firm called Crazy Eddie. In the 1980s, Crazy Eddie (”Our prices are…..INSAAAAANE”) perpetrated a $145 million swindle involving receipt skimming, bogus inventory and international money laundering. When Sam was busted, he ratted out his two cousins in return for a reduced sentence of six months house arrest.

According to a recent court case, Sam has funneled at least $250,000 to Barry Minkow, who is also a criminal. Minkow served seven years in prison for his role in ZZZZ Best, a fraudulent carpet cleaning company that cost investors $100 million. Minkow now runs an outfit called the Fraud Discovery Institute out of the Community Bible Church in San Diego, where he is a preacher. In one of the financial world’s great ironies, The Fraud Discovery Institute specializes in identifying companies that have supposedly cooked their books - though no reputable investigator has ever concurred with any of its analysis.

Both Sam and Minkow hold themselves out as reformed criminals who can shed light on corporate crime. But it is clear they have merely found a new scam: publishing false information for short-sellers. Utah Attorney General Mark Shurtleff, who has had dealings with Sam, has written a public letter warning investors that, “in light of Mr. Antar’s background as a convicted white collar criminal, we believe that the public should carefully scrutinize and objectively examine any public statements that Mr. Antar makes.”

Invariably, Sam and Minkow attack the same companies as the Cramer constellation of hedge funds, and, unsurprisingly, that is where they derive at least part of their income. Court documents show that Minkow has received at least $10,000 from Whitney Tilson, a friend of Cramer who has shorted companies along with David Einhorn, for whom Dan Loeb, a.k.a. Mr. Pink, vowed to go “to war.”

Mr. Pink, meanwhile, contracts with an outfit called Magic Consulting - owned by convicted stock manipulator Michelle McDonough (formerly Michelle Sarian). McDonough’s job is to coordinate a stable of internet stock message board posters and complicit journalists who bash stocks shorted by Loeb and his friends. McDonough was herself a fairly prolific message board basher, prior to going to prison in 2000.

One message board poster in McDonough’s stable is the crooked mortgage broker and financial flimflammer who is frantically emailing back and forth with former BusinessWeek reporter Gary Weiss in the winter of 2006, soon after Gary established his blog devoted to bashing Patrick Byrne and denying that phantom stock is a problem.

The flimflammer is named Floyd Schneider — a former employee of Amr Elgindy, the gun-toting goon, a.k.a. Manny Velasco, who plotted short strategies with Mr. Pink before instructing his Smith Barney broker to liquidate his kids’ trust funds on the day before 9/11, causing him to get caught in a giant stock manipulation scheme. Floyd has a long history of credit card fraud and stealing money from customers, and once he even filched $20,000 from his own uncle. On his death bed, Floyd’s father said to several associates: “My son - he is a liar and crook. Floyd is the reason that I am dying.”

Floyd has posted tens of thousands of messages smearing Patrick Byrne, Overstock, and many other companies–all, coincidentally, swimming in phantom stock. Meanwhile Sam Antar of Crazy Eddie, who is delivering large sums of money to convicted fraudster Barry Minkow (paid, in part, by Whitney Tilson, colleague of Mr. Pink and Cramer) has posted thousands of his own false and defamatory statements about Overstock, both on message boards and on his blog.

A number of journalists are on strangely good terms with these crooks. Fortune magazine, for example, has written a positive profile of Sam Antar. Roddy-Boyd-The-Post has written an email to a known conman in which he refers to Michelle McDonough as “our mutual best friend.”

But few journalists are closer to this cast of swindlers than Gary Weiss, the former BusinessWeek reporter.

And who, exactly, is this Gary Weiss character?