New York lawyer James P. Conroy is free on bail after being convicted on grand larceny charges in the alleged theft of $27.7 million from the company. The firm and its 76 broker associates are accused of selling $214 million of unregistered federal government mortgage-backed securities to 2,203 global investors over a 10-year period.

According to court records, Conroy is alleged to have directly advised Evergreen owner William J. Zylka of New Vernon, NJ in the scheme. Zylka, previously convicted, faces six to 18 years in prison for his part in the alleged $27-million theft.

Conroy faces at least four years in prison. His four sentences will run concurrently. The lengthiest are three sentences of four to 12 years each on the grand larceny convictions. He was also convicted on evidence tampering and conspiracy counts, according to Manhattan District Attorney Robert Morgenthau whose office handled the investigation of Conroy. The Evergreen case is being tried in federal courts in both New York and Tampa, FL.

Investors believed they were putting their money into US government mortgage-backed securities that would return an annual interest rate of 9% to 12%, documents filed by Orlando court-appointed trustee RW Cuthill allege.

Cuthill is suing 76 brokers and 15 companies. So far, according to court filings, 12 individuals have been convicted and eight companies have settled charges against them. Conroy is the third lawyer convicted in the case. The alleged fraud surfaced on Jan. 3, 2001 after Evergreen voluntarily filed for Chapter 11 protection under the US Bankruptcy Code.

Next on the court agenda is the May 3 re-trial of investment advisors J. Anthony Huggins of New Smyrna Beach, FL and Jon M. Knight of Sorrento, FL. Their three-week trial in 2002 ended in a hung jury.

Evergreen Security Ltd. formerly operated from a Downtown site at Capital Plaza office complex. The firm also had offices in the British Virgin Islands. The Boston-based Evergreen Investments family of mutual funds, owned by Wachovia Corp. of Winston-Salem, NC, is not associated or related to Evergreen Security Ltd.

Instant Insights /

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