Three accused in multimillion-dollar stock scheme

Wednesday, Oct. 27, 1999 | 10:52 a.m.

Testimony has begun in a federal trial involving three men accused of participating in a multimillion-dollar stock scheme that began in late 1991.

Special Assistant U.S. Attorney Bruce Bettigole told the jury the case is "about bribes and lies."

Michael Swan of Las Vegas, Keith Shwayder of Denver and accountant Kevin Orton of Salt Lake City are accused of paying bribes to stockbrokers to persuade them to recommend the stock of their companies, Las Vegas-based Teletek Inc. and its subsidiary, United Payphone Services Inc.

One of the ways the men paid the bribes, Bettigole said, "is literally by stuffing thousands of dollars in cash in Federal Express envelopes and sending it off to stockbrokers."

Bettigole said the men also paid many of their bribes in the form of stock.

"In order to carry this scheme out, it was necessary for these defendants to tell a lot of lies," he said.

Authorities have described Swan and Shwayder as former presidents of Teletek. On Tuesday, Bettigole described Orton as Swan's accountant and longtime friend.

The case against Swan, Shwayder and Orton stems from one of three related indictments returned by a grand jury in November 1996 against 30 defendants. Additional defendants later faced charges in connection with the scheme as well.

Most of the defendants have pleaded guilty and are awaiting sentencing.

Prosecutors claim the fraudulent activity continued until at least December 1995 and involved the bribing of stockbrokers in at least 10 states.

Bettigole said Orton had the responsibility of paying bribes and operating the principal stock and bank accounts used to carry out the scheme.

Salt Lake City attorney Mary Corporon, who represents Orton, described her client as a 49-year-old, law-abiding accountant.

Corporon said he has practiced in Salt Lake City about 20 years. Swan and his companies made up no more than 50 percent of Orton's business, the attorney said.

Swan's wife, Claudia Higgins, also was indicted in November 1996. Higgins, a former officer and director of United Payphone, later pleaded guilty to one count of wire fraud and is awaiting sentencing.

U.S. District Judge Philip Pro is presiding over the trial for Swan, Shwayder and Orton, which is expected to last at least six weeks.

A Las Vegas jury convicted Florida stockbrokers Robert Orkin and William David Jones in May 1998 for their roles in the scheme.

Last month, prosecutors filed a motion to reduce Orkin's 65-month prison sentence because of his cooperation with law enforcement authorities since his conviction.

Authorities brought Orkin to Las Vegas prior to this week's trial, where he is expected to testify as a government witness.