Accused D.C. call-girl madam also a stock picker

WASHINGTON, Apr 30 (Reuters) The woman accused of running a prostitution ring serving Washington's elite, whose clients included at least one US government official, also appears to be something of a stock picker.

The woman, Deborah Jeane Palfrey, asked a federal judge on Monday for permission to sell almost 5,000 shares of Dolby Laboratories Inc. that were in an account frozen by the government because she believed the stock had reached its high point.

''I believe it's reached its peak,'' she told Judge Gladys Kessler. Palfrey said she bought the shares in the sound system company at about 22 dollars per share. Dolby is at about 37 dollars a share now which could be about a 75,000 dollars profit before taxes.

''I don't want to see it waste away,'' Palfrey said, facing an expensive trial with most of her assets frozen.

''At this time I can't do that,'' Kessler said. She said there were procedures for such a request and Palfrey could discuss it with her new attorney when one was appointed in the coming days.

Palfrey was indicted last month on criminal racketeering and conspiracy charges for running the service between 1993 and 2006. The government accused her of earning more than 2 million dollars.

She initially considered selling a mountain of telephone records from her business, Pamela Martin and Associates, to raise funds for her defense but instead gave some to ABC News in hopes they would uncover witnesses to aid her defense.

ABC News reported on Friday that one of her clients was a U.S. deputy secretary of state, Randall Tobias, who was in charge of foreign aid. He abruptly resigned Friday citing personal reasons.

ABC reported that Tobias, 65 and married, said he had received massage services, which Palfrey seized on for her defense. She has countered that she ran a legal, high-end adult fantasy service.

''I am dismayed however, by Mr. Tobias's refusal to come forward until now with this extremely valuable exculpatory evidence,'' she said, reading a statement to a swarm of reporters.

''Had he done so earlier along with the many, many others who have used my company's services throughout the years, I most likely would not be in my current predicament,'' she said.

Palfrey said she hoped other people would be identified from the records for her defense. One of her lawyers representing her in a related civil case said he expected Tobias to be called as a witness.

Reuters JS RS2331