of financial services companies controlled by Allen Stanford, until it
was seized by United States (U.S.) authorities in early 2009.
Headquartered in the Galleria Tower II in Uptown Houston, Texas, it
had 50 offices in several countries, mainly in the Americas, included
the Stanford International Bank, and said it managed US$8.5 billion of
assets for more than 30,000 clients in 136 countries on six
continents.[1][2] On February 17, 2009, U.S. Federal agents put the
company under management of a receiver, because of charges of
fraud.[3][4] On February 27, 2009, the U.S. Securities and Exchange
Commission amended its complaint to describe the alleged fraud as a
"massive Ponzi scheme".
http://www.reuters.com/article/2012/03/06/us-stanford-jury-idUSTRE82516X20120306
Allen Stanford found guilty of vast fraud
By Anna Driver
HOUSTON | Tue Mar 6, 2012 2:51pm EST 10 minutes ago
(Reuters) - Allen Stanford was convicted on Tuesday of running a $7
billion Ponzi scheme, a verdict that caps a riches-to-rags trajectory
for the former Texas financier and Caribbean playboy.
It was a vindication for the U.S. government, which closed down
Stanford's financial empire in February 2009 but had failed for years
to address signs that the business was built on air. The Stanford case
was the biggest investment fraud since Bernard Madoff's.
Stanford was found guilty on 13 counts of a 14-count criminal
indictment, including fraud, conspiracy and obstructing an
investigation by the U.S. Securities and Exchange Commission. He was
found not guilty on one count of wire fraud. The charges carry a
possible prison sentence of nearly 20 years.
As Stanford, 61, was led out of the courtroom after the verdict, he
touched his fist to his heart and looked at the bench where his mother
and two daughters sat. He has been jailed since his June 2009 arrest.
"We're disappointed in the outcome," said Stanford's defense attorney
Ali Fazel. "We do expect an appeal." He said he expects sentencing in
several months.
The verdict came less than a day after a Houston federal jury said it
could not reach a decision, and U.S. District Judge David Hittner
instructed jurors to keep deliberating.
Still, the verdict may prove only a moral victory for Stanford's
victims, most of whom have received none of their money back.
"For all the investors I think there is a sense of relief that they
weren't just fools" said Cassie Wilkinson, a Houston investor in
Stanford funds who attended the six-week trial. "There was a jury of
12 people who found the same thing - that we were just conned."
Stanford's unraveling was one of the most closely watched fraud cases
since Madoff's. Madoff, 73, pleaded guilty in 2009 to orchestrating
what prosecutors have called a $64.8 billion Ponzi scheme. He is
serving a 150-year prison sentence.
'PERSONAL ATM'
Stanford's personal fortune was once valued at $2.2 billion.
At trial, prosecutors told how Stanford repeatedly raided the bank he
owned in Antigua, Stanford International Bank, using it as his
"personal ATM."
He bought a castle in Florida for one of his girlfriends and his
oldest daughter lived in a million-dollar condominium in Houston. He
wore custom-made suits, lived in luxury homes and on a yacht in the
Caribbean and bankrolled a $20 million prize for an international
cricket tournament.
The government's star witness, former Stanford aide James Davis,
testified that he and Stanford faked documents and made up financial
reports to calm investors and fool regulators. They funneled millions
of dollars from Stanford International Bank to a secret Swiss bank
account that Stanford tapped for his personal use, Davis testified.
Davis, 63, has pleaded guilty to three criminal counts.
Stanford's lawyers portrayed their client as a visionary who was not
involved in his firm's daily activities. They blamed Davis for any
fraud and argued that Stanford's businesses were viable until the
government shut down Stanford Financial Group in Houston in February
2009. Left with no money, Stanford was declared indigent by the court
and his defense was paid for with public funds.
Wendell Odom, a criminal defense attorney in Houston who observed much
of the trial, said Stanford's attorneys did a good job of discrediting
Davis by getting him to admit to being a liar. But they failed to
develop an alternative theme for the jury. "There was just too much
evidence," he said.
BRAIN INJURY
While in jail awaiting trial, Stanford was beaten by another inmate,
leaving him with a brain injury and broken bones in his face. He then
became addicted to an anti-anxiety medication. His lawyers argued that
those events caused him to lose his memory, making him incompetent to
stand trial.
After eight months at a prison hospital in North Carolina, he was
deemed competent to stand trial. Before his trial began on January 23,
Stanford's lawyers said their client wanted to tell his story to the
jury, raising the possibility that he would take the stand.
Ultimately, he did not testify.
Stanford grew up in Mexia, Texas. He studied finance at Baylor
University, where Davis, who later become chief financial officer of
Stanford Financial Group, was his roommate.
In the 1980s, Stanford bought up real estate in Houston with his
father, later selling it at a profit. In 1986, he opened an offshore
bank on the Caribbean island of Montserrat and, after banking
regulations there tightened, he moved his operation to Antigua.
The bank specialized in aggressively selling certificates of deposit
to wealthy people, his former employees testified at the trial. They
targeted clients in Latin America, especially Venezuela, and oil
company workers with fat pensions who lived along the U.S. Gulf Coast.
In Antigua, he became a philanthropist and sponsor of cricket, the
national sport, and was known as "Sir Allen" after being knighted
there in 2006. By 2008, Stanford made No. 205 on Forbes magazine's
list of the wealthiest Americans.
But questions surfaced about how Stanford International Bank's CDs
could persistently pay above market rates. By February 2009, investors
were trying to withdraw their money and, on February 17 of that year,
the government descended on his headquarters in Houston and shut it
down.
Antigua stripped him of his knighthood and seized his local assets.
(Reporting by Anna Driver and Eileen O'Grady; Editing by Martha
Graybow and Matthew Lewis)
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
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