How is this for a creative scheme? Develop a reputation as someone who can spot overpriced stocks, start your own Web site, team up with two FBI agents to get information on companies facing criminal probes and then short the stocks and come out looking like a financial genius.

That's exactly what the U.S. Attorney's Office alleged today in the indictment of five people including notorious short seller AMR Elgindy — also known as Anthony Pacific.

The indictment alleges that in recent years Elgindy induced two FBI agents to provide him with information on companies and then, "used the confidential law enforcement information to make decisions on whether to buy sell or hold stock in the companies."

With a reputation as a noted short seller, the government alleges Elgindy would often spread the word of his short sales on his Web site AnthonyPacific.com — allowing subscribers to benefit from the non-public FBI information as well. For that privilege, the subscribers paid dearly, up to $600 per month.

Most of these stocks were very small companies that traded on what's known as the OTC Bulletin Board.

According to the government, FBI Special Agent Lynn Wingate and Jeffrey Royer who until last year was with the FBI, tapped into FBI criminal data bases at various times in order to pass on information to Anthony Pacific.

If convicted all five face up to 20 years in prison.

Unlike a lot of schemes that flourished during the bull market, this short selling racket continued into the spring of this year, as short sellers even without non-public information made a lot of money betting against the market.