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Texas tycoon R. Allen Stanford convicted of bilking $7B from investors in 20-year Ponzi scheme
HOUSTON (AP) ' Texas tycoon R. Allen Stanford spent more than 20 years charming investors, who handed him billions of dollars they had spent their lives accumulating through hard work and saving.
Stanford promised them safe investments that would help fulfill their dreams of being able to retire comfortably or pay their children's college tuition. All the while, he was pulling their money out of his Caribbean bank to pay for a string of failed businesses and a jet-setting lifestyle.
Stanford, once considered one of the wealthiest people in the U.S., with a financial empire that spanned the Americas, was convicted Tuesday on charges he bilked investors out of more than $7 billion.
Prosecutors said his business acumen was nothing more than an old-fashioned Ponzi scheme, and jurors convicted him on 13 of 14 charges, including conspiracy, wire and mail fraud. He was acquitted on a single count of wire fraud that accused him of bribing a regulator with Super Bowl tickets.
Stanford looked down when the verdict was read in federal court in Houston, where his financial empire was based. His mother and daughters hugged one another, and one of his daughters started crying.
"We are disappointed in the outcome. We expect to appeal," Stanford attorney Ali Fazel said after the hearing. He said he couldn't comment further because of a gag order Hittner placed on attorneys in the case.
Prosecutors and Stanford's relatives declined to comment on the verdict, but former investor Cassie Wilkinson found comfort in it.
"As an investor, you have to doubt whether or not you were stupid or just taken advantage of. This relieves that doubt. It's a vindication," said Wilkinson, 62, who lives in Houston. She declined to say how much money she and her husband lost.
A civil trial in which prosecutors hope to seize about $300 million from more than 30 Stanford-controlled accounts in countries including Switzerland, Britain and Canada started later Tuesday before the same jury and will continue Wednesday. U.S. District Judge David Hittner will likely set Stanford's sentencing date after the civil trial, which could last as little as a full day.
Jurors have been told not to comment on the case until the civil trial ends.
The most serious charges against Stanford carry up to 20 years in prison, and if Hittner ordered him to serve his sentences consecutively, the 61-year-old could spend the rest of his life behind bars.
In a similar but unrelated case, disgraced financier Bernard Madoff was sentenced to 150 years in prison for orchestrating the largest Ponzi scheme in history.
Prosecutors say Stanford used investors' 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.
Stanford's net worth was once estimated at more than $2 billion, but he received court-appointed attorneys after his assets were seized or frozen.
During the more than six-week trial, prosecutors presented testimony from ex-employees, emails and financial statements that they said showed how Stanford took billions of dollars over 20 years from certificates of deposit, or CDs, at his bank on the Caribbean island nation of Antigua. They said he lied to investors from more than 100 countries, telling them their funds were being safely invested in stocks, bonds and other securities.
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 and other documents to conceal the fraud.
Stanford did not testify in his own defense.
His attorneys told jurors the financier was trying to consolidate his businesses to repay investors when authorities seized his companies. They accused Davis of being behind the fraud and lying to get a reduced sentence.
Davis pleaded guilty to three fraud and conspiracy charges in 2009 as part of a deal with prosecutors.
Three other former Stanford executives are scheduled for trial in September. A former Antiguan financial regulator accused of accepting bribes from Stanford also was indicted and awaits extradition to the U.S.
Stanford, the largest private employer on Antigua, was widely known as "Sir Allen" after being knighted by the island nation's government.
The financier's trial was delayed after he was declared incompetent in January 2011 due to an anti-anxiety drug addiction he developed in jail. He underwent treatment and was declared fit for trial in December.
A U.S. Securities and Exchange Commission lawsuit that also accuses Stanford and his former executives of fraud is pending.
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