U.S. gets OK to go after fraud funds
The jury that convicted former Texas tycoon R. Allen Stanford of operating a massive Ponzi scheme found Thursday that there was sufficient evidence that $330 million in frozen foreign bank accounts he controlled was money he stole from investors, clearing the way for U.S. authorities to go after the funds.
The decision in the criminal forfeiture case followed Stanford’s conviction Tuesday on 13 of 14 fraud-related counts for bilking investors out of more than $7 billion through the sale of certificates of deposit from his bank on the Caribbean island nation of Antigua.
Thursday’s decision doesn’t guarantee that U.S. authorities will get the money, as liquidators appointed by an Antiguan court are also vying for control of many of the same accounts. Authorities say it could take years to get the money because each request must be evaluated by the countries where the frozen accounts are, including Switzerland, Britain and Canada.
A U.S. postal inspector testified that he had traced $2.5 million in investor money to two accounts controlled by one of the financier’s girlfriends, including money that had been moved from an account dubbed “Baby Mama Trust.” Stanford, who is going through a divorce, fathered children by several girlfriends, whom authorities called his “outside wives.”
U.S. District Judge David Hittner set a June 14 sentencing date for Stanford on the criminal convictions. Although the most serious charges carry prison terms of up to 20 years, Hittner could send Stanford, 61, to prison for life by ordering his sentences to run consecutively. Stanford, who has been jailed since 2009, will remain incarcerated as he awaits sentencing.
Prosecutors said Stanford lied to investors from more than 100 countries, telling them their funds were being safely invested when instead he used the money to fund a string of failed businesses, bribe regulators and pay for luxuries such as yachts and private jets.
His attorneys portrayed Stanford as a visionary entrepreneur who made money for investors and conducted legitimate business deals. They accused the prosecution’s star witness, a former Stanford employee, of being behind the fraud.