Allen Stanford found guilty in Ponzi scheme

Posted by RJ & Makay on March 7, 2012

allen-stanford-stanford-financial-group, antigua, fraud, ponzi-scheme, sec

Allen Stanford found guilty in Ponzi scheme

R. Allen Stanford was found guilty by a federal court yesterday of running a $7 billion Ponzi scheme.  He was convicted on 13 of 14 charges in a case that lasted almost three years. Charges included fraud, obstructing a Securities and Exchange Commission (SEC) investigation and conspiracy to commit money laundering.  The high-profile former head of now-defunct Stanford Financial Group faces a possible life sentence.

“Today’s guilty verdicts send a resounding message that those who violate the law and obstruct SEC investigations will be held accountable,”  said Robert Khuzami, enforcement director of the SEC.  We applaud the skill and tenacity of the prosecutors handling the case.”

Defense attorney Ali Fazel expressed disappointment in the outcome of the trial and expects to appeal.

In 2006, former Stanford employees brought a lawsuit alleging that the company was running a Ponzi scheme.  It was later found that the SEC’s Ft. Worth, Texas office was aware since 1997 that Stanford was possibly operating a Ponzie scheme, said Andrew Stoltmann of Stoltmann Law Offices in Chicago, who specializes in investment fraud.

In 2009, Stanford was accused by the U.S. government of swindling thousands of investors by selling them certificates of deposit issued by a bank he controlled in Antigua.  He told the investors the funds would be invested in stocks and bonds.  Instead, he funneled the funds into risky real estate assets and his own business and lavish lifestyle, covering his trail by bribing an Antiguan regulator and an outside auditor.

At trial, Mr. Stanford’s attorneys argued that he ran a legitimate business and that any fraud would have been committed by James Davis, his chief financial officer.  In 2009, Davis pleaded guilty to three counts and agreed to cooperate with prosecutors.

“This closes one chapter in the ongoing saga of one of the most egregious con men of modern times,”  said Mike Patton, president of Integrity Wealth Management.  “Still in limbo, however, is the reimbursement for those who were duped by the charismatic ex-billionaire.”

RJ & Makay




Stanford guilty in ponzi scheme (  WSJ, March 6, 2012

Allen Stanford found guilty of $7 billion ponzi scheme (  AdvisorOne, March 6, 2012

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