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Lease rates predict another short squeeze

Section: Daily Dispatches

4:30p EST Saturday, January 22, 2000

Dear Friend of GATA and Gold:

Here's the latest news on the campaign of the U.S.
government to keep the investment adviser Martin
Armstrong from telling what he knows about
manipulation of markets.

Please post this as seems useful.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Armstrong loses lawyers when they lose fees

By Tony Hagen
Trenton, N.J., Times
January 22, 2000

NEW YORK -- Criminal defense lawyers for accused bond
swindler Martin A. Armstrong of Maple Shade, N.J.,
yesterday dropped their client over a fee issue.

Richard Altman of Pelletieri, Rabstein, and Altman of
Princeton, and Marc Durant of Durant and Durant of
Philadelphia, said they could no longer represent the
trader because a federal judge had ordered them to
surrender $1.2 million in retainers he paid them.

quot;The fees were ordered returned. That leaves counsel
with no ability to properly prepare a defense for the
defendant,quot; Altman said yesterday in U.S. District
Court in lower Manhattan.

His firm had received $841,000 from Armstrong. He said
it had already invested roughly $200,000 in time and
expenses on the case.

Durant, who must surrender $390,000, has invested more
than $130,000 in time and expenses.

Armstrong has pleaded not guilty to civil and criminal
charges that he ran a $1 billion bond swindle from
offices at Carnegie Center in West Windsor, N.J., where
his companies Princeton Global Management and Princeton
Economics International are located.

Armstrong has said he is a scapegoat for offenses
committed by others.

Up to 100 Japanese companies were victimized,
prosecutors allege. Armstrong's companies are now under
control of court-appointed receiver Alan Cohen.

The trader was imprisoned Jan. 14 by U.S. District
Judge Richard Owen, who ruled that Armstrong concealed
and destroyed corporate assets and documents in
contempt of an order to surrender them to Cohen. This
week Owen ruled that $1.3 million in legal fees paid to
Armstrong's lawyers out of corporate funds must also be
turned over to Cohen.

Owen said the lawyers should have been wary of
accepting the money because Armstrong was under
investigation at the time he signed contracts to pay
the lawyers. Much of the money was wired to Armstrong's
lawyers in the hours before his arrest on Sept. 13.

quot;All the law firms were aware of the nature of the
government's investigations into Armstrong's business
dealings, and therefore, at the very least, in addition
to knowing they were not being paid by the client,
should have been aware of the possibility that they
were being paid with corporate funds obtained by
fraud,quot; Owen wrote in his ruling.

Owen's ruling took Altman by surprise yesterday as he
learned of it when he arrived in Manhattan for a
pretrial conference with prosecutors from the U.S.
attorney's office and U.S. District Judge Lawrence
McKenna, who is handling Armstrong's criminal trial.

McKenna yesterday assigned a free public defender to
Armstrong's defense after Altman and Durant said they
would drop the case. The Durant firm was hired by
Altman, since the Princeton attorney does not have a
license to practice in New York, whereas Durant does.

Altman said he would appeal Owen's ruling on the fees.
He told McKenna he would investigate the possibility
that Armstrong's friends and business associates might
contribute to the trader's legal defense. quot;There's some
possibility of that although that hasn't materialized
yet,quot; Altman said.

As part of Owen's order, Armstrong's civil defense
lawyer, Martin Unger, was ordered to surrender the
$100,000 he was paid as a retainer. Unger could not be
reached for comment yesterday.

The trader's lawyers had argued the retainers were
rightfully theirs because their contracts were arranged
before the Sept. 13 freeze on Armstrong's corporate
assets. They contended that as a corporate head
Armstrong was entitled to defense funds paid by his

Armstrong has been imprisoned at the New York
Metropolitan Correctional Center after Owen found him
in civil contempt of an order to surrender assets
belonging to Princeton Global Management and Princeton
Economics International. Up to $15 million is still
missing, investigators contend.

Yesterday Altman said work is proceeding on drawing up
an appeal to have Armstrong released from jail. The
trader's lawyers have said he turned over everything in
his possession and has no further assets.

In other action yesterday, Altman asked McKenna to help
Armstrong gain visitation rights at the jail. He said
the trader had been isolated in a cell with a quot;drug
felonquot; and hadn't been given the papers needed to file
for visitor privileges. He said the trader's family had
attempted to visit Armstrong on Monday but had been
turned away.

quot;It's pretty sad. He hasn't been convicted of anything
yet. We still haven't seen any of the alleged Japanese
victims come forward,quot; Altman said.