Irvine Man Gets 7 Years in Stock Scheme

LOS ANGELES — An Orange County man who turned fugitive for a month after he was convicted of Southern California’s largest stock manipulation scheme has been sentenced to seven years, three months in federal prison.

Ahmad Naim Bayaa, 44, of Irvine, the principal architect of a $12.5-million scam, was caught in March as he left a Huntington Beach convenience store where he and a cohort allegedly tried to pass counterfeit checks. Charges of forgery and passing counterfeit checks are pending in state court.

Bayaa’s failure to appear at his original sentencing date in February caused U.S. District Judge Richard A. Paez in Los Angeles to tack on two more years to what would have been a five-year sentence. The sentence came late Tuesday.

Bayaa sent a confidential letter to Paez explaining his monthlong flight. In court, he said he felt he was unfairly convicted, according to his lawyer, Stanley I. Greenberg of Los Angeles.

“He feared a long sentence and deportation to Lebanon, where he would be a stateless person. It all sort of overwhelmed him,” Greenberg said. Assistant U.S. Atty. Barbara Scheper said simply: “He panicked.”

Bayaa and an aide, Abdul Deeb, 46, of Anaheim, were convicted a year ago of conspiracy, money-laundering and securities fraud involving stock of Bayaa’s Southland Communications Inc., a Santa Ana provider of paging services.

Deeb has appealed his conviction and his sentence of five years, three months. Greenberg said that Bayaa also intends to appeal.

Scheper and other federal prosecutors have called the scheme concocted by Bayaa, Deeb and two others the largest stock manipulation case ever prosecuted in the area.

Bayaa, Deeb and the 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, Scheper said.

Defense attorneys have contended that jurors never understood the complex case. Deeb’s lawyer, Joel Levine, has said he didn’t think that a crime had even been committed.

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Bayaa, a Palestinian whose naturalization process was held up when he was indicted in October 1994, 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, 34, of Miami and Shaw Tehrani, 45, of Atlanta, have pleaded guilty to lesser charges. Tehrani has been sentenced to four years in prison and is appealing his sentence. Anton, who also pleaded guilty to unrelated bank fraud charges in Miami, is a fugitive.

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