Feds seek millions after Stanford verdicts


Prosecutors went after $300 million in Allen Stanford’s foreign banking accounts just hours after he was convicted of defrauding thousands of investors.
About noon Tuesday, a 12-member jury found Stanford guilty on 13 of 14 counts in a scheme the government said cost certificate of deposit investors $7.2 billion with the 2009 collapse of Stanford International Bank Ltd. in Antigua.
The charge that Stanford was declared not guilty was one out of five wire-fraud counts.
That count dealt with bribes and SuperBowl tickets to a former Antiguan bank regulator who faces his own trial in September with three former Stanford executives, including Baldwyn native Laura Pendergest-Holt.
Stanford, 61, faces more than 200 years in prison and huge financial fines with the conviction, although he’s been declared indigent with attorneys being paid with public money. Stanford has been in federal detention since his arrest in mid-2009. The government opposed bail, saying he was a flight risk.
His indictment, amended from 21 to 14 counts in May 2011, accused him of mail and wire fraud, obstruction of a federal investigation and conspiracies to commit mail and wire fraud, to launder money and to obstruct a federal investigation.
He will not be sentenced for weeks, perhaps months, as the U.S. Parole Service completes a report to guide U.S. District Judge David Hittner, who presided over the seven-week trial in Houston, Texas, where Stanford built his financial services empire.
What happens to the recovery of funds for Stanford’s victims wasn’t immediately clear.
That part of the puzzle is under the jurisdiction of a parallel civil proceeding against Stanford and others in a Dallas, Texas, federal court, which appointed a receiver to find and sell Stanford’s U.S. assets for a victims fund.
Reactions to verdict
Paul Gallagher’s view of any restitution reflects a common response among victims.
“The receiver’s going to spend all that,” said Gallagher, 64, of Spring Texas, who lost $1.3 million in the scheme.
He said his only hope, with other victims, is help from the Securities Investors Protection Corp., a quasi-government agency funded by the investment industry. SIPC’s assistance is being fought out in a Washington, D.C., court.
Stanford’s defense team said it was “disappointed” with the verdict and announced plans to launch an appeal.
Hittner has a gag order on all attorneys in the case, so not much more was said, but prosecutors reportedly appeared pleased with the trial outcome.
Stanford, once considered one of the wealthiest people in the U.S., looked down when the verdict was read. His mother and daughters, who were in the federal courtroom, hugged one another, and one of the daughters started crying.
Stanford will remain incarcerated until he is sentenced.
After Stanford’s conviction, the same jury considered prosecutors’ efforts to seize funds from more than 30 bank accounts held by the financier or his companies around the world, including in Switzerland, the United Kingdom and Canada.
The prosecution’s star witness – James M. Davis, the former chief financial officer for Stanford’s various companies – told jurors he and Stanford worked together to falsify bank records, annual reports and other documents in order to conceal the fraud.
Davis cooperating
In August 2009, 62-year-old Davis, who lived near Baldwyn and worked out of Memphis and Tupelo offices, pleaded guilty to his part in the scheme. He faces up to 30 years in prison and said he hopes to receive a lighter sentence because of his cooperation and testimony.
Family members said Stanford wanted to testify and jurors were told he would do so, but his attorneys apparently convinced him not to take the witness stand.
Stanford’s attorneys told jurors the financier was trying to consolidate his businesses to pay back investors when authorities seized his companies. Stanford’s attorneys highlighted his work to build up Antigua’s economy as well as his philanthropic efforts on the island. Stanford, the largest private employer on the island nation, was widely known as “Sir Allen” after being knighted by Antigua’s government.
The financier’s attorneys accused Davis of being behind the fraud and of lying so he could get leniency.
Davis’ testimony will be required in September when three other indicted former Stanford executives are to be tried. A former Antiguan financial regulator accused of accepting bribes from Stanford also was indicted and awaits extradition to the U.S.
Stanford and the former executives also are fighting a U.S. Securities and Exchange Commission lawsuit filed in Dallas that makes similar allegations.
Juan Lozano of The Associated Press contributed to this report.

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