By Patsy R. Brumfield/NEMS Daily Journal
Allen Stanford’s financial empire was built on smoke and mirrors, prosecutors told a 15-member jury Tuesday in the international fraud trial.
Prosecutor Gregg Costa said in a Houston, Texas, federal courtroom that Stanford used investors’ money to buy homes and yachts and fund cricket matches.
The trial began Monday and is expected to last six to eight weeks.
Stanford, 61, is accused of 14 counts that he perpetrated a $7.2 billion fraud on investors of certificates of deposit sold through his Stanford International Bank Ltd. on the Caribbean island of Antigua.
He blames former Union County resident James M. Davis for the financial collapse of Stanford Financial Group, the corporate umbrella.
Davis, Stanford’s Baylor University roommate, was SFG chief financial officer nearly two decades.
“I didn’t oversee anything in the investment portfolio, that was the CFO’s responsibility,” Stanford told Reuters in a 2009 interview. “The CFO had investment committees, the chief investment officer reports to him.”
Robert Scardino, one of Stanford’s attorneys, told jurors the financier was a clever and resourceful businessman who for 22 years paid investors every penny that he promised them.
“We’re going to prove to you that (his business empire) was real and it existed,” Scardino said.
Scardino said Stanford didn’t need to steal depositors’ money and use it as personal loans.
“If he needed money, he could go to a bank and borrow up to $1 billion,” he said.
While Stanford maintained his innocence to the June 2009 federal indictment, Davis pleaded guilty two months later and likely hopes to receive a more lenient sentence after he testifies for the government.
Informed sources tell the Daily Journal that Davis’ testimony could begin next week. A New York Post report Tuesday said Davis is scheduled for 15 hours on the stand.
The Associated Press contributed to this report.