WASHINGTON — Texas billionaire R. Allen Stanford was indicted and jailed Friday on charges his international banking empire was 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. At a court hearing in Richmond, Va., a federal judge agreed with prosecutors that Stanford poses a flight risk and ordered him to remain in custody until a detention hearing in Houston.
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 it 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 attorney, 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 that 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.
Investigators say that even as Stanford claimed healthy returns for those investors, he was secretly diverting more than $1.6 billion in loans to himself.
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, 59, 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 of the same scale.