Stock Manipulator Being Sought as Fugitive

One of two Orange County men convicted in Southern California’s largest stock manipulation scheme failed to appear for sentencing and is being sought as a fugitive.

Ahmad Naim Bayaa, 43, of Irvine, the principal architect of a $12.5-million scam, disappeared before he was to be sentenced Friday in Los Angeles. U.S. District Judge Richard A. Paez issued a warrant for his arrest.

Bayaa and an aide, Abdul Deeb, 45, of Anaheim, were convicted in May of conspiracy, money-laundering and securities fraud involving stock of Bayaa’s Southland Communications Inc., a Santa Ana provider of paging services.

Paez sentenced Deeb on Friday to five years, three months in federal prison. The judge allowed Deeb, who plans to appeal his convictions, to remain free on bail until March 31 to get his affairs in order.

Prosecutors called the scheme concocted by Bayaa, Deeb and others the largest stock manipulation case ever prosecuted in the area.

Bayaa, Deeb and two others were accused of setting up secret phony trading accounts in 1988 and 1989 in an effort to boost Southland Communications stock price and control the market for nearly all the company’s stock.

As the stock value went up, Bayaa and Deeb borrowed mainly from brokerages to buy more stock.

In 1992, the stock nearly doubled in price from $8.75 a share to $17, and the company said it didn’t know why. The Securities and Exchange Commission halted trading and eventually sued Bayaa and the others, all of whom agreed to repay a total of $736,935 in stock trading profits to settle the lawsuit.

Six brokerage firms lost $11.5 million, and one of them, Suplee Reed & Co. in Media, Pa., was forced out of business. In addition, individual investors lost about $1 million that they had paid Bayaa for stock in the company. The stock, however, had been put in Bayaa’s name, said Assistant U.S. Atty. Barbara Scheper. Defense attorneys assert that jurors never understood the complex case. Deeb’s lawyer, Joel Levine, said he didn’t think that a crime had even been committed.

Bayaa’s failure to appear for sentencing surprised his lawyer, Stanley I. Greenberg.

“He had been checking in with pretrial [probation] officers regularly since he was indicted,” Greenberg said. “He was in my office the day before sentencing.”

Bayaa is divorced and childless, but most of his extended family lives in the Southland, the lawyer said, and one of his brothers, Assem, was in court Friday for the sentencing. Greenberg, who talked with family members, said he believes they were “in the dark” about Bayaa’s actions.

Authorities aren’t sure if Bayaa, a Palestinian whose naturalization process was held up when he was indicted in October 1994, has fled the country. He would have faced the possibility of deportation after serving a prison term.

“At this point, we don’t know enough now to search outside the country,” Scheper said. “But it seems likely that if he’s not in the United States, it would be a good step to follow any connection he has in the Middle East.”

Bayaa moved to the United States in the 1970s, founded Southland Communications in 1981 and served as its president. Deeb, a former oil industry consultant, was a longtime friend who helped bring overseas investors--all relatives and friends--to the company.

The other two defendants, Eduardo Anton, 33, of Miami and Shaw Tehrani, 44, of Atlanta, have pleaded guilty to lesser charges and are awaiting sentencing.

Southland Communications, operating as National Paging, filed for bankruptcy protection in 1993 and was sold and moved to Huntington Beach.