Stanford faces detention hearing after indictment on 21 counts of fraud

By Calvin Palmer

A judge in Virginia has ordered a detention hearing for indicted billionaire R. Allen Stanford after agreeing with prosecutors that he poses a flight risk.

Magistrate Hannah Lauck made the ruling despite opposition from Stanford’s lawyer, Christina Sarchio, who said Stanford is not a flight risk and is essentially broke because the government has frozen his assets.

Prosecutors say Stanford’s international banking empire was really just a Ponzi scheme built on lies and bribery to swindle investors out of $7 billion.

Steven Tyrrell of the Justice Department says more than $1 billion from Stanford’s alleged scheme remains unaccounted for.

Stanford will remain in custody until the hearing can be held in Houston where a grand jury indicted him and four others on fraud charges linked to his company, Stanford Financial Group.

Stanford was indicted along with Laura Pendergest-Holt; Houston-based accountant Gilberto Lopez; Houston-based global controller Mark Kuhrt; and Leroy King, a joint American-Antiguan citizen charged with monitoring the Antigua bank.

James M. Davis, the chief financial officer, has been cooperating with officials and was charged in a separate instrument, not an indictment.

Another individual was charged in Miami with document shredding.

The indictment alleges that Stanford and his co-defendants engaged in a scheme to defraud investors who bought roughly $7 billion in certificates of deposit administered by Stanford International Bank Ltd, the bank in Antigua controlled by Stanford.

Federal prosecutors said Stanford and the others misused most of those investor assets — including diverting more than $1.6 billion into undisclosed personal loans to Stanford.

At the same time, said Lanny Breuer, assistant attorney general of the Justice Department’s criminal division, Stanford and his employees were assuring investors their investments were “safe and secure.”

Stanford promised returns that “in the end were simply too good to be true, in light of the bank’s actual investments and assets”.

Stanford, Davis and Pendergest-Holt previously have denied wrongdoing.

Dick DeGuerin, Stanford’s criminal defense attorney, said in a statement: “Since at least February of this year, Allen Stanford has been working with lawyers to meet and challenge the false accusations against him. Those accusations being that the Stanford companies were fraudulent and constituted a Ponzi scheme.

“To the contrary, the present insolvency of the Stanford companies was caused by the SEC’s heavy-handed actions, which have destroyed and continue to destroy much of the value of the Stanford companies and consequently the interests of investors.”

The Houston indictment against Stanford and the others alleges 21 counts of conspiracy, wire fraud, mail fraud and obstruction of justice, and conspiracy to launder money, although Lopez and Kuhrt are not facing obstruction charges.

The charges accuse King of taking bribes to ignore alleged misdealings. 

[Based on reports by the Associated Press and Houston Chronicle.]

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1 Comment

Filed under Business, Crime, Justice, News

One response to “Stanford faces detention hearing after indictment on 21 counts of fraud

  1. FORMER STANFORD EMPLOYEE

    hey boss alway remember when you dig a hole for somebody,always remember to dig one for yourself

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