Posted On: March 7, 2012

Texan R. Allen Stanford Convicted on 13 Criminal Counts Over $7.2B Ponzi Fraud

Nearly three years after he was indicted for defrauding investors in a $7.2 billion Ponzi scam involving certificates of deposit that are now worthless, a Houston jury has convicted R. Allen Stanford of 13 of 14 criminal counts, including fraud, conspiracy to commit money laundering, conspiracy to commit wire or mail fraud, wire fraud (from April 24, 2006, December 24, 2008, January 5, 2009, and February 12, 2009), mail fraud, and obstructing investigators. The only count jury members found him not guilty of was wire fraud (from February 2, 2006). Collectively, the Texas financier’s convictions carry prison sentences totaling up to 230 years.

Prosecutors depicted Stanford, 61, as a con man that used investors’ money to get very rich and pay for his businesses. (At one point, his net worth was over $2 billion.) They also say he bribed regulators so he could get away with his scam.

During his criminal trial, financial statements e-mails that were presented as evidence and ex-employees who testified helped paint a picture of the Texan as someone who spent 20 years defrauding investors by selling CDs through his bank in Antigua. James M. Davis, who served as former CFO for Stanford’s different companies, also was a witness for the prosecution. He stated that he and Stanford together falsified annual reports, bank records, and other documents to hide the fraud. Prosecutors contended that Stanford lied to depositors from over 100 nations by claiming that their cash was being invested in bonds, stocks, and other securities.

Meantime, Stanford’s lawyers argued that he was trying to figure out how to repay investors when authorities took control of his companies. They say Davis was the one running the Ponzi scam and that the latte lied in court to get a reduced sentence. Davis, who struck a plea deal with prosecutors, has pleaded guilty to fraud and conspiracy charges.

Stanford wasn’t declared fit for trial until December 2011. Previous to that, he was found incompetent after he developed a medication addiction and was injured during a jail fight.

Now, there will be a shorter civil trial with the same jury over prosecutors’ attempts to get money from the over 30 bank accounts belonging to Stanford and his companies. These accounts are located around the world. A postal inspector says there are 29 bank accounts with $300 million in investor funds.

That said, Stanford’s legal woes aren’t over. He and his former executives are defendants in a Texas securities fraud lawsuit filed by the US Securities and Exchange Commission over the Ponzi scam. Also, the end of his criminal trial means that the securities fraud lawyers of investors who are seeking to recover their losses will now be able to talk to witnesses that were off limits until now.

If you were a victim of the R. Allen Stanford Ponzi scam, contact the securities fraud law firm of Shepherd Smith Edwards and Kantas, LTD, LLP today.

Moneyman Stanford guilty on 13 of 14 counts, My San Antonio, March 7, 2012

Stanford Guilty On 13 Of 14 Counts, Wall Street Journal, March 6, 2012

Financier Stanford convicted in $7 billion fraud, Associated Press, March 6, 2012


More Blog Posts:

Texas Financier Allen Stanford’s Ponzi Scam: SIPC Asks District Court to Toss Out SEC Lawsuit Seeking to Reimburse Fraud Victims, Stockbroker Fraud Blog, March 5, 2012

SEC and SIPC Go to Court Over Whether SIPA Protects Stanford Ponzi Fraud Investors, Stockbroker Fraud Blog, February 6, 2012

SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors, Institutional Investor Securities Blog, February 10, 2012