Stanford indicted in alleged $7B fraud scheme.
WASHINGTON (AP) — Brash Texas billionaire R. Allen Stanford was indicted Friday on charges his international banking empire was really just a Ponzi scheme built on lies, bluster, and bribery.
The Justice Department announced charges against Stanford and six others who allegedly helped the tycoon run a $7 billion swindle.
Among those charged were executives of Stanford Financial Group and a former Antiguan bank regulator who prosecutors say should have caught the fraud but instead took bribes to let the scheme continue.
Robert Khuzami, the enforcement director for the Securities and Exchange Commission, said investigators have built “an impressive criminal case from the rubble of this massive fraud.”
If convicted of all charges in the 21-count indictment, Stanford could face as much as 250 years in prison, officials said.
Dick DeGuerin, Stanford’s lawyer, said in a written statement that Stanford was “confident that a fair jury will find him not guilty of any criminal wrongdoing.”
The indictment unsealed Friday in Houston charged Stanford and other executives at his firm falsely claimed to have grown $1.2 billion in assets in 2001 to roughly $8.5 billion by the end of 2008. The operation had roughly 30,000 investors, officials said.
Secretly, though, Stanford diverted more than $1.6 billion in personal loans to himself, according to investigators.
Court papers charge Stanford and top executives orchestrated the massive fraud by advising clients to buy certificates of deposit from the Antigua-based Stanford International Bank.
While Stanford is less well-known than the infamous swindler Bernard Madoff, authorities say both men’s businesses were based on the same type of scam — faking investment returns while attracting new investors to keep the operation afloat.
“This case is a typical Ponzi scheme, robbing Peter to pay Paul,” said Gregory Campbell of the U.S. Postal Inspection Service.
Authorities say they are investigating 100 other possible Ponzi schemes, although none on the scale of the Stanford or Madoff cases.
“We will find you, we will stop you, and we will make you pay for your crime,” said Campbell.
Stanford, 59, has been working since February to challenge what his attorney called “the false accusations against him.” DeGuerin said that rather than resulting from fraud or a Ponzi scheme, “the present insolvency of the Stanford Companies was caused by the SEC‘s heavy-handed actions, which have destroyed and continue to destroy much of the value” of the companies and their investors.
A group of cheated Stanford investors said in a statement that their losses “are devastating, as senior citizens are losing their homes, going without medical care, and becoming a burden on their children and families.”
Stanford, in FBI custody after surrendering Thursday, was to appear in federal court in Richmond, Va. later Friday for an initial appearance and to deal with detention issues.
The others indicted were Stanford executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt.
A separate indictment unsealed in Florida accused a fourth Stanford worker, Bruce Perraud, of destroying records important to the investigation.
Prosecutors charged Leroy King, the former chief executive officer of Antigua’s Financial Services Regulatory Commission, with conspiracy to obstruct an SEC investigation.
In February, King told reporters the commission properly scrutinized Stanford’s business.
Prosecutors allege King accepted more than $100,000 in bribes to help Stanford continue his fraud.
At his zenith, Stanford was a larger-than-life figure in Antigua. His enterprises there include a newspaper, two restaurants, a development company and the ornately landscaped Stanford cricket grounds, where he shook up the staid world of professional cricket last year by bankrolling the purse in a $20 million winner-take-all match.
Newly filed SEC documents accuse Stanford and his finance chief, James M. Davis, of conducting a massive Ponzi scheme” in which early investors were paid returns from money put in by later investors. Davis has been cooperating with federal investigators.
DeGuerin said Stanford surrendered Friday afternoon “to some FBI agents who were hiding out in black SUVs outside the residence where he was staying in Virginia.”
“He walked out and asked if they had a warrant,” DeGuerin said. He said Stanford told them to arrest him if they had a warrant and said if they didn’t he would go back to Houston Friday to turn himself in.
FBI spokesman Richard Kolko declined to comment.
Jeff Tillotson, who represents Pendergest-Holt, chief investment officer of Stanford’s parent company, told The Associated Press, “We obviously deny that our client has committed any crime.” He has said she was “set up” by Stanford.
Associated Press writers Marcy Gordon in Washington, Larry O’Dell in Richmond, Va., and Linda Franklin and Regina L. Burns in Dallas contributed to this report.
By DEVLIN BARRETT
Nanny Pelosi Giving Stanford A Nice Big Democratic Hug
Here is conclusive, irrefutable proof that alleged conman R. Allen Stanford is a Democrat.
Stanford is known by many aliases including: Robert Allen Stanford, Allen Stanford, and Sir Allen Stanford. Regardless of what he calls himself, we know what he truly is at heart: a Democrat. He is as big of a Democrat as Bernard Madoff is (more on Madoff’s political contributions can be found at this site). Both men are huge financial contributors to the Democratic Party and enjoyed hobnobbing with DFL power brokers. The content of their character is typically Democrat as well. They lie, cheat, and steal with no regard for others and no intelligence to tell them they will eventually get caught.
Stanford stands accused of scamming billions of dollars from clients of his investment firm Stanford Financial Group over many years. Around $8 billion of client money is unaccounted for. Stanford, once estimated to be worth $2 billion, is accused of being the architect of the fraud. He is also suspected of helping Mexican drug lords launder money. Law enforcement authorities are currently trying to locate him as he seems to have disappeared. I wonder why…
ABC News ran a story this evening about Stanford’s cozy relationship with Washington D.C. Democrats (video). In Brian Ross’ piece, Stanford is shown at the Democratic National Convention in August 2008. In the video, he is seen hugging Speaker of the House Nancy Pelosi (D-CA). Former President and sexual predator Bill Clinton is shown thanking Stanford for his sponsorship of a big event. The National Democratic Institute even invited Stanford to speak to them.
Total donations to Democrats: $704,600.
via DFL: Dirty Frauds and Liars » Blog Archive » Proof That Swindler R. Allen Stanford Is A Democrat.