Billionaire Financier Allen Stanford Lands Himself Behind Bars
Allen Stanford was convicted on Tuesday of running a $7 billion Ponzi scheme in a vindication for the U.S. government, which closed down Stanford’s financial empire in February 2009 but failed for years to address signs the billionaire financier’s business was built on smoke and mirrors.
Stanford was found guilty on 13 counts of criminal indictment, including fraud, conspiracy, and obstructing an investigation by the U.S. Securities and Exchange Commission. Stanford was acquitted on a single charge, being found not guilty on one count of wire fraud. The charges carry a possible prison sentence of nearly 20 years.
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But while Stanford’s conviction and sentencing will no doubt put smiles on many faces, most of Stanford’s victims have not yet received any of their money back, and may never see it again.
Stanford’s personal fortune was once valued at $2.2 billion. Stanford bought a castle in Florida for one of his girlfriends, his oldest daughter lived in a million-dollar condominium in Houston, and the Texas financier and playboy himself wore custom-made suits, lived in various luxury homes around the world, and had a yacht in the Caribbean. During his six-week trial, Stanford repeatedly raided the bank he owned in Antigua, Stanford International Bank, using it as what prosecutors called his “personal ATM.”
Former Stanford aide James David testified that he and Stanford faked documents and made up financial reports to calm investors and fool regulators. Davis, who pleaded guilty to three criminal counts, testified that he and Stanford together funneled millions of dollars from Stanford International Bank to a secret Swiss bank account that Stanford tapped for his personal use.
Stanford’s lawyers blamed Davis for any fraud while arguing that their own client was completely innocent. They portrayed their client as a visionary wholly uninvolved in the firm’s daily activities whose only mistake was hiring the wrong people. They further argued that Stanford’s businesses were viable until the government shut down Stanford Financial Group in Houston in February 2009. Stanford’s defense was paid for with public funds, as he was declared indigent by the court after having all of his assets seized.
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