Manhattan D.A. Dismisses Morgan Stanley’s Charges Against Hotshot Employee

Officials from Morgan Stanley Dean Witter & Company paid $10,000 to set up a former employee for computer fraud, then withheld information about the payments from prosecutors, the Manhattan District Attorney’s office has concluded.

After a nine-month investigation, Assistant District Attorney Leroy Frazer moved on May 18 in Manhattan Criminal Court to have all charges against the former first-year analyst, 25-year-old Christian Curry, dismissed.

But while the criminal case against the former hotshot banker is over, the District Attorney’s office is continuing its probe. “There is a continuing investigation into the conduct of both the confidential informant and the officials at Morgan Stanley,” said Daniel Castleman, chief of investigations at the District Attorney’s office.

Mr. Castleman declined to comment further, but said he was not aware of any similar cases in recent history.

The events leading up to the unusual case began with publication of nude photographs of Mr. Curry in a gay men’s magazine, followed soon by his dismissal from Morgan Stanley and then his arrest on Aug. 20 in a small park on East 43rd Street.

Mr. Curry was charged with five felony counts, including attempted computer trespass, tampering with physical evidence and fifth-degree conspiracy. Police alleged that he tried to bolster a wrongful-termination civil suit against the firm, which had fired him in April 1998, by planting racist and homophobic e-mails in Morgan Stanley’s computer system.

Although Morgan Stanley executives had attributed the termination to abuse of his corporate expense account, Mr. Curry believes he was fired because nude photographs of him in a gay pornographic magazine, Playguy , had been published the previous week. Mr. Curry claimed the photographs, which had been taken during a modeling photo shoot, were published without his authorization.

The arrest followed meetings between Mr. Curry and an undercover cop. According to Mr. Frazer’s court statement, those meetings were brokered by a “confidential informant.” The Observer has learned that the informant was Charles Joseph Luethke, an old acquaintance of Mr. Curry’s from his years as an undergraduate at Columbia College.

“The post-arrest investigation has revealed that while there was clearly probable cause for defendant’s arrest, we do not believe we could sustain our burden of proof beyond a reasonable doubt at trial,” said Mr. Frazer in his May 18 statement to the court. “It was learned after arrest that the confidential informant had met with officials at Morgan Stanley and informed them of defendant’s alleged intent [to plant e-mails] … The investigation further revealed that there had been ongoing negotiations between officials at Morgan Stanley and the [confidential informant].”

Mr. Frazer added that the informant had been wired a $10,000 payment just days after Mr. Curry’s arrest. Sources familiar with the case told The Observer that between two and five officials from the firm were involved in negotiations and payoffs to Mr. Luethke, a self-described financial consultant who lives in Manhattan.

Reached for comment, Mr. Luethke disputed the District Attorney’s findings. “The firm’s lack of ethics is only outweighed by Morgenthau’s all-timers,” he told The Observer . “There was a lot more money involved, it was intended for the cops, and Morgenthau and the Mayor knew what was going on. I am just waiting for the F.B.I. to make their move, and if anybody believes the stories coming out of any of those camps, I have a stadium to sell them in midtown Manhattan, tax-free.”

Mr. Luethke at first refused to explain his statements further, then called back to say he had taped a conversation with Mr. Frazer that proved the District Attorney’s office had prior knowledge of the confidential informant’s meetings with Morgan Stanley before Mr. Curry’s arrest-a direct contradiction of the statement from the District Attorney’s office, which said they learned of these meetings after Mr. Curry’s arrest.

Mr. Curry would not comment for this story, but his girlfriend, Marisa Wheeler, had previously told The Observer that he had first met Mr. Luethke in 1994 through his Columbia fraternity, Kappa Delta Rho. However, the two had a falling-out a few months after meeting, and did not speak again until shortly after Mr. Curry’s firing from Morgan Stanley last summer. Then, according to Ms. Wheeler, his former friend approached him, expressing concern about the termination and offering to assist him with a wrongful-termination suit against the firm.

According to similar accounts from Ms. Wheeler and Robert Martin, deputy inspector of the New York Police Department, Mr. Curry unwittingly met with the undercover police officer on two occasions, Aug. 17 and Aug. 20, 1998. During the meetings, which were conducted in a small park near Grand Central Terminal, Mr. Curry and the officer discussed the notion of planting racist and homophobic e-mails in the Morgan Stanley e-mail system to bolster a possible wrongful-termination suit. At the second meeting, where Mr. Curry was arrested, he paid the cop $200 and offered him a sample e-mail message-allegedly to plant.

After the arrest, spokesmen for Morgan Stanley reiterated that they had fired Mr. Curry for abusing his expense account. Firm insiders painted him as a bad seed whose credibility had been crushed by his felony charges.

But over the next nine months, a different story emerged. According to the court statement from Mr. Frazer-who referred The Observer ‘s calls to Mr. Castleman for comment-the “informant” had presented himself to Morgan Stanley in the months before the arrest, stating that he had information about Mr. Curry’s alleged plot to smear the company in a civil suit. The informant subsequently tipped off the police, setting up the negotiations that led to the arrest. However, when the police questioned Morgan Stanley officials, they did not admit to such discussions with the informant, much less to paying him $10,000. Mr. Frazer’s statement adds that “subsequent facts have come to our attention concerning the confidential informant which … tend to undermine his credibility as a possible witness at trial.”

At press time, spokesmen for Morgan Stanley had not returned several calls for comment from The Observer . Marilyn Mode, deputy commissioner for public information for the New York Police Department, refused to comment on the specifics of the case or Mr. Luethke’s allegations that police had received money. But she said: “Ultimately, the decision to prosecute or not is made by the District Attorney’s office.”

For Mr. Curry, an Ivy League graduate who says he has spent his last year doing modeling work, the District Attorney’s findings are a vindication. Still, neither he nor his criminal attorney, Earl Rawlins, would comment whether he planned to pursue his civil suit against Morgan Stanley.

Mr. Curry said he was at his girlfriend’s graduation from Columbia College and couldn’t talk. He added: “You think I will ever give you a fucking comment, you fat-assed bitch?”

“All I can say is that I think he’s a perfect gentleman, and I didn’t believe that he maliciously did anything from the start,” said Mr. Rawlins. “The [District Attorney's office] took a lot of effort and they conducted an investigation, and they said we were right. They dismissed the case.”