Make us your home page
Instagram

Texas billionaire R. Allen Stanford jailed, accused of $7 billion Ponzi scheme

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.

Texas billionaire R. Allen Stanford jailed, accused of $7 billion Ponzi scheme 06/19/09 [Last modified: Monday, November 7, 2011 4:50pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press Writer.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. United Airlines CEO to investors: We'll be more focused on customers

    Airlines

    CHICAGO — The CEO of United Airlines assured shareholders Wednesday that the company is doing all it can to be more customer-friendly since video surfaced of a passenger being violently ejected from a plane last month.

    Chicago Police arrest protesters after they sat down in a busy street blocking traffic outside a United Airlines shareholders meeting Wednesday, in downtown Chicago. The people who were arrested were protesting the low pay of employees of companies that provide meals and other services for United Airlines at Chicago's O'Hare Airport.
[Associated Press]
  2. Humana adding 200 telemarketing jobs in Tampa Bay

    Economic Development

    TAMPA — Health insurance company Humana Inc. is hiring more than 200 workers in Tampa Bay. The Louisville, Ky.-based company said Wednesday that the new positions will focus on phone sales for Humana's direct marketing services department.

  3. Tampa Bay home prices still soaring amid tight supply

    Real Estate

    Sales of Tampa Bay homes dropped in April but prices surged yet again as Florida's real estate market continued to be defined by tight supply and high demand.

    The historic Century Oaks estate overlooking Clearwater Harbor has sold for $11.18 million, the most ever paid for a home in the Tampa Bay area. [Courtesy: Coastal Properties Group]
  4. These days, don't hit the theme park without an app and a phone charger

    Florida

    Emile Crawford stocks two back-up phone battery chargers these days when she takes her kids to Disney World. But she dare not venture into a theme park without a smart phone app, an accessory becoming as necessary as sunscreen in Florida theme parks.

    A wristband visitors will wear at the new Volcano Bay water park in Orlando, Florida. The wristband, called Tapu Tapu, tells you when it's your turn to get on a ride. It also lets you pay for food so you don't have to carry a wallet and opens lockers so you don't have to  carry a key. (Universal via AP)
  5. James Cameron, Zoe Saldana and more appear at Disney's Pandora

    Florida

    ORLANDO — As he stood on a stage at Disney World Wednesday, director James Cameron revealed his teenage dreams.

    Zoe Saldana tweeted a photo of herself from Wednesday's appearance at a new land in Disney's Animal Kingdom, Pandora -- the World of Avatar. The land is based on James Cameron film, in which she stars. Photo via Twitter.