Stanford faces sentencing for $7B-plus ponzi scheme
Published: June 14,2012
HOUSTON, Texas — If federal prosecutors have their way, former jet-setting Texas tycoon R. Allen Stanford could receive a prison sentence that spans two centuries for bilking investors out of more than $7 billion over two decades in one of the largest ponzi schemes in U.S. history.
Calling Stanford a “ruthless predator” who stole from investors “simply to satisfy his own greed and vanity,” prosecutors are asking U.S. District Judge David Hittner to sentence the one-time billionaire to 230 years in prison, the maximum sentence he faces at a hearing today. A jury convicted Stanford in March on 13 of 14 fraud-related counts.
Stanford’s attorneys are asking for a maximum of 44 months, a sentence he could actually complete within about eight months because he has already been in jail since his arrest in June 2009.
Prosecutors also want Hittner to order Stanford to forfeit $5.9 billion, but that would be symbolic because Stanford, now penniless, had to rely on court-appointed attorneys to defend him.
Prosecutors said Stanford used the money from investors, some of them in Mississippi, who bought certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua to fund a string of failed businesses, bribe regulators and pay for a lavish lifestyle.
Defense attorneys portrayed Stanford, 62, as a visionary entrepreneur who conducted legitimate business deals.
Before imposing the sentence, Hittner was expected to hear from two people speaking on behalf of investors about how Stanford’s fraud has affected their lives.
One of those individuals is Angela Shaw, a Dallas woman who founded the Stanford Victims Coalition after she and her husband lost $2 million in the alleged scheme. Shaw said she hopes Hittner imposes the maximum sentence, which would surpass the 150-year term Bernard Madoff received for orchestrating the largest pyramid scheme in history.
“At a minimum, Allen Stanford deserves bragging rights” over Madoff, she said. “His victims have been living in a perpetual and unending sentence.”
The jury that convicted Stanford also allowed U.S. authorities to go after about $330 million in stolen investor funds sitting in the financier’s frozen foreign bank accounts in Canada, England and Switzerland.
But due to legal wrangling, it could be years before the more than 21,000 investors recover anything.
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.
Three other former Stanford executives are scheduled for trial in September. A former Antiguan financial regulator was indicted and awaits extradition to the U.S.
Stanford and his former executives also are fighting a lawsuit from the U.S. Securities and Exchange Commission that accuses them of fraud.
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