Comparator Systems Focus of Criminal Investigation

Federal authorities have launched a criminal investigation into Comparator Systems Corp., the Newport Beach fingerprint technology firm whose stock soared and crashed two years ago.

The FBI and the U.S. attorney’s office in Los Angeles interviewed at least one former employee, and are poring over boxes of company information about securities deals, say the employee and federal sources.

Spokesmen for both agencies declined to comment.

Comparator was the focus of a Securities and Exchange Commission investigation after its stock zoomed from pennies a share to $1.87 in three record days of Nasdaq trading in May 1996. The stock price crashed as abruptly, leaving investors with $2.9 million in losses.

The Comparator debacle gripped Wall Street, as regulators held up the company--now inactive--as an example of penny-stock trading gone berserk.

In a 1996 lawsuit, the SEC accused the company of lying about its assets, but the agency closed its probe that September without levying fines or major penalties.

“I thought this whole issue was dead and gone,” said Summer Churchill, Comparator’s former corporate secretary. “I was surprised to get the FBI’s call.”

An official at the General Accounting Office, the investigative arm of Congress, said he knew about the probe into “allegations of wire and mail fraud,” but declined to comment further.

In January, Churchill said she was contacted by the FBI and asked to come to the agency’s offices in Santa Ana for questioning, said her attorney, Reg Fudge Jr.

“Summer has cooperated fully and will continue to do so,” Fudge said.