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Financier Stanford indicted in $7 billion fraud scheme

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] Texas financier Allen Stanford appeared Friday in the US District Court for the Eastern District of Virginia, after being indicted on fraud and obstruction charges related to a $7 billion fraud scheme. Stanford, through his investment companies Stanford International Bank (SIB), Stanford Group Company (SGC) and Stanford Capital Management (SCM), is accused of violating the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940. Also indicted Friday were SFG chief investment officer Laura Pendergest-Holt, SFG chief accounting officer Gilberto Lopez, SFG gobal controller Mark Kuhrt, and former administrator and CEO of Antigua's Financial Services Regulatory Commission Leroy King. Each defendant is charged with one count of conspiracy to commit mail, wire, and securities fraud, seven counts of wire fraud, 10 counts of mail fraud, and one count of conspiracy to commit money laundering. Stanford, Pendergest-Holt, and King are also charged with with conspiracy to obstruct a Securities and Exchange Commission (SEC) proceeding. If convicted, Stanford faces up to 250 years in prison. In March, a judge in the US District Court for the Northern District of Texas indefinitely froze the assets of Allen Stanford. The judge also issued an order releasing most customer brokerage accounts over $250,000 that had been frozen since February]. The previous month, a federal judge issued a temporary restraining order to freeze Stanford's assets, as customers rushed to withdraw their investments from SIB branches in Antigua and Venezuela. Stanford was charged in February with orchestrating a fraudulent $7 billion investment scheme by selling certificates of deposits on the promise of improbably high interest rates.

Full post as published by JURIST - The Paper Chase on June 19, 2009 (boomark / email).