Sunday, Nov. 19, 2006 | 7:16 a.m.
Perhaps Warren Trepp is always just at the wrong place at the wrong time, a victim of terrible and perpetual coincidence.
By his early 30s, he was chief trader for the notorious 1980s junk bond trader Michael Milken.
Then a friend helped him sell a bundle of stock in a collectibles business in 2002, and he wound up selling it to Tom Noe, a Republican bigwig in Ohio recently convicted on multiple counts of fraud and larceny and laundering money to the Bush/Cheney re-election campaign.
Trepp formed the software company eTreppid Technologies that later sought national security contracts with the government. A woman, Letitia White, who did lobbying work for the firm is said to be under investigation in connection with the widening federal bribery probe following the conviction of a former congressman.
Finally, his friendship with Nevada Gov.-elect Jim Gibbons landed him on the front page of The Wall Street Journal in an examination of contracts that eTreppid received with help from Gibbons, the Republican congressman from Reno.
Trepp, who has never been convicted of a crime and has strongly proclaimed his innocence, is nevertheless connected - sometimes tangentially - to some of the most infamous financial and political scandals of the past 15 years.
Trepp, 56, was a whiz-bang trader at the Beverly Hills office of Milken's firm Drexel Burnham Lambert before moving to the Nevada side of Lake Tahoe, where he became a philanthropist and invested in various businesses. He has produced a movie and a show currently on Broadway, and he has hobnobbed with celebrities.
Now, though, his software company and his relationship with Gibbons are at the center of an explosive lawsuit and countersuit involving national security secrets and allegations of the misuse of a law enforcement agency for narrow financial gain.
The lawsuit and countersuit between Trepp and a software developer and former business partner in eTreppid, Dennis Montgomery, involve a conflict over valuable computer code used by the government in national security matters.
Trepp has accused Montgomery of stealing and deleting eTreppid property. Montgomery has alleged that Trepp gave Gibbons unreported gifts in exchange for helping Trepp muscle Montgomery out of ownership of the disputed software code, which Montgomery developed. Specifically, Montgomery contends that Trepp influenced Gibbons, who in turn pressured the FBI and a U.S. attorney's office to conduct an illegal search of Montgomery's home and storage unit in an attempt to steal the software code.
Trepp contributed $90,000 to Gibbons' gubernatorial campaign and also took the Gibbons family on a Caribbean cruise that the congressman failed to report to the House Ethics Committee.
Gibbons has said the two are friends and that the failure to report the cruise was a clerical error, not an attempt to conceal anything. He and Trepp point out that the campaign donations complied with Nevada law.
Trepp and Gibbons have denied allegations that Trepp was trying to buy influence, calling them "outrageous."
In e-mail responses to the Sun's questions, Trepp said: "I never asked Jim Gibbons to intervene with the FBI and to my knowledge he never did. I never contacted the FBI about Montgomery. The FBI knows exactly why they raided Montgomery. Montgomery's lies will never end!"
Trepp also unleashed a raft of accusations against Montgomery. He cited an eTreppid employee who received a temporary protective order against Montgomery. One was issued in July 2004 but was dissolved in September 2005. Montgomery was not charged with a crime.
Trepp also noted that he won a legal battle against Montgomery earlier this year, a preliminary injunction in Nevada District Court.
Montgomery's attorney, Michael Flynn, said the preliminary injunction was an example of the type of "home-team" justice for which Nevada has become notorious, which is why he filed suit in federal court. He called Trepp's dirt-dishing about Montgomery "desperate and baseless."
It's not surprising that Trepp would bring a tire iron to this legal battle. He smoked four packs of cigarettes a day and ate peanut butter-and-jelly sandwiches while working alongside Milken in the famously intense Beverly Hills office of Drexel.
Milken in 1990 pleaded guilty to six felony counts, agreed to pay $600 million in fines and restitution and served 22 months in prison for illegal trading activities. (Montgomery alleges that Trepp has made Milken a silent partner in eTreppid.)
The Securities and Exchange Commission in September 1995 filed an administrative complaint against Trepp, seeking to bar him from the securities industry for his alleged role in an illegal 1986 transaction. An administrative law judge in August 1997 found that Trepp's actions at Drexel were "egregious, recurring and intentional" but dismissed the SEC case against him because the government waited too long to bring its charges against him.
During that period, Trepp built a massive estate on Lake Tahoe, where his neighbors were Milken, Steve Wynn and the drummer for Credence Clearwater Revival. He helped found The Parasol Community Foundation, a charitable organization, and became involved in the Lake Tahoe Shakespeare Festival.
Trepp also had an interest in rare coins, and in 1991 he formed Spectrum Numismatics International Inc., a privately held wholesaler of rare coins. In December 1999, Spectrum merged with publicly traded Greg Manning Auctions Inc., an auction house. Spectrum was to be paid $25 million in GMAI stock in exchange for becoming a subsidiary of GMAI.
On Jan. 14, 2002, Trepp sold 500,000 shares of GMAI to Noe at a 36 percent discount, according to a wire transfer obtained by the Ohio state auditor, who was investigating Noe's theft of money from the state's workers' compensation fund. The stock sale was first reported by The (Toledo) Blade.
Noe went on to lend money from the Ohio worker's compensation money that he controlled to GMAI, which gave him coins as collateral. Noe fraudulently used the coins as part of his coin inventory, even though they were actually collateral for the loans to GMAI. Prosecutors are seeking a 20-year prison term for Noe.
In his e-mails to the Sun, Trepp said that he was looking to unload the stock on behalf of the Parasol Foundation and that a friend set him up with Noe. "I have never met or spoken to Tom Noe!" he wrote. He declined to identify the friend who arranged the sale to Noe. By Trepp's account, his stock sale to Noe was mere coincidence.
Then there's Letitia White.
White disclosed that she lobbied on behalf of eTreppid on budget and defense issues. The Wall Street Journal's story about Trepp refers to an unnamed lobbyist working on behalf of eTreppid, hoping to influence Gibbons to obtain special federal contracts for the company. (Other Nevada lawmakers also worked to get contracts for eTreppid.)
A New York Times story dubbed White "K Street's queen of earmarks," a reference to federal money that members of Congress direct to a favorite cause or company.
The same story said White is under investigation in connection with her ties to Rep. Jerry Lewis, R-Calif., and other members of Congress at the nexus of appropriations, defense and intelligence.
That investigation is said to be an outgrowth of the one that landed former California Republican Rep. Randy "Duke" Cunningham in prison.
Trepp wrote in his e-mailed responses that he never hired White. And a spokesman for White's firm said that she was never paid to lobby for eTreppid.
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