HOUSTON (AP) – The jury that convicted former Texas tycoon R. Allen Stanford of operating a massive Ponzi scheme found Thursday that there is sufficient evidence $330 million in frozen foreign bank accounts he controlled is money he stole from investors, clearing the way for U.S. authorities to go after the funds.
The decision in the criminal forfeiture case followed Stanford’s conviction Tuesday on 13 of 14 fraud-related counts for bilking investors out of more than $7 billion through the sale of certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua.
Thursday’s decision doesn’t guarantee that U.S. authorities will get the money, as liquidators appointed by an Antiguan court are also vying for control of many of the same accounts. Authorities say it could take years to actually get the money because each request must be evaluated by the countries where the frozen accounts are located, including Switzerland, Britain and Canada.
A U.S. postal inspector testified that he traced $2.5 million in investor money to two accounts controlled by one of the financier’s girlfriends, including money that had been moved from an account dubbed “Baby Mama Trust.” Stanford, who is going through a divorce, fathered children by several girlfriends, whom authorities called his “outside wives.”
U.S. District Judge David Hittner also set a June 14 sentencing date for Stanford on the criminal convictions. Stanford has been locked up since 2009, and while the most serious charges carry prison terms of up to 20 years, Hittner could send the 61-year-old Stanford to prison for life by ordering his sentences to run consecutively. In a similar but unrelated case, Bernard Madoff was sentenced to 150 years in prison for orchestrating the largest pyramid scheme in history. Stanford, who has been jailed since 2009, will remain incarcerated as he awaits sentencing.
Prosecutors said Stanford lied to investors from more than 100 countries, telling them their funds were being safely invested when instead he used it 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. They accused the prosecution’s star witness, an ex-Stanford employee, of being behind the fraud.
Stanford did not testify in his own defense.
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.
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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