Insider-Trading Witness Says He Bought ‘Burner’ Phones for Boss

(Bloomberg) -- An employee of a New York restaurant owner accused of participating in a global insider-trading network told jurors he bought as many as 10 unregistered “burner” phones for his boss.

Prosecutors say such phones were used by Georgios Nikas, who owns the GRK Fresh Greek restaurant chain, to communicate with participants in a network that was active in Europe, Asia and North America. Some of the tips Nikas allegedly passed to others came from a friend, Telemaque Lavidas, who is now being tried for insider-trading.

Nikas’s cousin, Panayotis Giatrakos, who was hired by the restaurateur in 2015, told jurors in federal court on Thursday that his boss wanted him to purchase unregistered flip phones at a store near the GRK Fresh location in Manhattan’s downtown financial district.

“He asked me to buy them, then buy a prepaid SIM card, place it in the phone, then drop it off at GRK Fresh,” said Giatrakos, who testified under a grant of immunity. “I realized that it was a little bit suspect.”

Nikas, who is now in Greece and considered a fugitive by U.S. authorities, is charged with passing secret corporate information and trading on illegal tips.

The testimony by Giatrakos was as a government witness against Lavidas, a New York resident charged with providing Nikas with confidential information about Ariad Pharmaceuticals Inc., a Boston-based maker of cancer drugs. Prosecutors said Lavidas got the tips from his father, a former Ariad director.

Giatrakos said he was hired by Nikas to do business development, real estate and marketing for GRK Fresh, which at its height had four restaurants in New York, three in Washington and two in Dubai.

Phones Picked Up

Giatrakos testified he didn’t know who used the phones. He said Nikas asked him on some occasions to confirm that they had been picked up from the restaurant. Giatrakos estimated he purchased the phones for Nikas from five to 10 times.

The testimony was part of the insider-trading trial of Telemaque Lavidas, a New York resident charged with providing Nikas with confidential information about Ariad Pharmaceuticals Inc. Prosecutors said Lavidas, a friend of Nikas, got the tips from his father, a former Adriad director.

Giatrakos said he had met Lavidas on several occasions, though he never saw the two men exchanging information about individual stocks and never saw Lavidas with one of the burner phones.

Giatrakos said he often socialized with Nikas, who closely followed stock-market developments and once showed him an entry showing his $6 million position in Inc.

“He was definitely following the stock market constantly,” Giatrakos said. “If he was free, he was looking at a screen.”

Prosecutors rested their case on Thursday. Jurors are expected to begin deliberating the case next week, after Lavidas’s lawyers finish presenting their defense.

The case is U.S. v. Lavidas, 19-cr-716, U.S. District Court, Southern District of New York (Manhattan).

©2020 Bloomberg L.P.

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