Fallen financier Allen Stanford’s gotten some bad news this week – among them that he will have to find another way to pay his mounting legal bills.
Stanford and four others are charged with masterminding a $7.2 billion Ponzi scheme on certificate of deposit investors with his Stanford International Bank Ltd. in the Caribbean.
Wednesday, U.S. District Judge Nancy Atlas in Houston, Texas, ruled that Stanford and the executives can’t use $100 million in Lloyd’s of London directors and officers insurance coverage to pay their defense lawyers.
In August, Atlas presided over a four-day hearing with testimony about allegations of the investment scheme.
Lloyd’s sought to convince her that money laundering was part of the scheme and would release it from its obligations.
In Atlas’ ruling, she said Lloyd’s proved it was more likely than not that Stanford “knowingly committed acts of money laundering” of corporate funds that should have been disclosed to investors and regulators.
But she noted she doesn’t contend the evidence supports any criminal conduct issues.
Stanford and co-defendants – including Laura Pendergest-Holt, formerly of Baldwyn – insist they are innocent of the charges. His trial begins in January, with the others later.
Stanford also is contesting civil action in Dallas, Texas, by a court-appointed receiver to liquidate all his personal and corporate assets so that investors can recoup huge losses when Stanford’s financial empire collapsed early in 2009.
Another bit of bad news for Stanford came Wednesday that Stanford’s U.S. Virgin Islands affiliate was barred from a 2007 tax incentive on the construction of a global management complex there.
Construction was expected to be finished by mid-2009, but tax breaks haven’t been granted because it lacks a government-issued certificate of need.
Contact Patsy R. Brumfield at (662) 678-1596 or firstname.lastname@example.org.
Patsy R. Brumfield/NEMS Daily Journal