FBI used as alibi in child-porn case

Kim Smith

Friday, July 27, 2001 | 10:51 a.m.

The suspect in a multimillion dollar Ponzi scheme, who also faces 40 charges in connection with sex-related crimes, insists that he was working for the FBI and had a legitimate reason for possessing child pornography.

Franklyn Perry's attorney, Barry Levinson, told Justice of the Peace Tony Abbatangelo this morning that Perry was given permission by the FBI to have child pornography because he was working with them to arrest others on child porn charges.

Perry was arrested July 17 on fraud and child pornography charges, and the Clark County District attorney's office was given until today to file formal charges.

Chief Deputy District Attorney Christopher Laurent filed 40 sex-related charges this morning, but the district attorney's office has decided not to file additional charges until police are further along in their investigation of the alleged Ponzi scheme.

Police allege Perry told investors he was loaning money to high-roller gamblers who had hit their credit limits at area casinos. He would pay some investors a few hundred dollars a week, saying it was the return on the money they gave him. The weekly payoffs often enticed others into the scheme, which required a minimum buy-in of $10,000, police said.

So far, police have seized more than $23 million from Perry and have compiled a list of more than 800 alleged victims, Laurent said today.

Laurent told Abbatangelo the child pornography found in Perry's possession pre-dates his arrangement with the FBI.

According to police reports, Perry, while incarcerated three years ago, convinced a young girl to pose for sexually explicit photographs and then managed to have the photos delivered to him. He also convinced the girl, who was 12 to 13 at the time, to engage in sex acts while on the phone with him. The site of Perry's incarceration and the charges that led to his conviction were not included in the report.

The photographs were found while authorities were investigating Perry in connection with the fraud scheme.

Perry, 61, faces six counts of sexual assault of a minor under 14, four counts of attempted sexual assault of a minor under 16, 15 counts of unlawful use of a minor in the production of pornography and 15 counts of possession of child pornography.

Laurent asked Abbatangelo to hold Perry without bail, saying he believes Perry has money hidden in off-shore accounts.

Levinson hotly denied that accusation, saying Perry has led authorities to all of the money.

Abbatangelo set Perry's bail at $2 million. Should Perry raise bail the judge said he would hold a hearing to determine the source of that money.

Still, it is doubtful Perry will be released before his trial. Federal authorities have placed a no-bail hold on him for allegedly violating the terms of his parole in an earlier fraud scheme case.

Abbatangelo also scheduled Perry's preliminary hearing for Aug. 9.

Clark County District Attorney Stewart Bell said Thursday that once Metro officers do a little more "leg work," grand jurors will begin meeting to discuss the fiscal aspects of the Perry case.

Grand juries serve two purposes, Bell said. They can meet as an "investigative tool" with subpoena powers or they can be convened for the purposes of deciding whether prosecutors have enough evidence to proceed to trial.

In the Perry case, Bell said a decision has yet to be made as to whether the district attorney's office will take their case to a grand jury for purposes of securing an indictment or if they will file a criminal complaint in Justice Court.

Should his office seek an indictment, prosecutors will present their evidence to a separate grand jury.

Bell said he believes it will be at least a couple of weeks before the investigative grand jury meets.