Cricket

Stanford built $7bn Ponzi

2012-03-01 13:58

Houston - The financier and cricket mogul Allen Stanford mocked his "gullible" investors as he built a $7 billion Ponzi scheme to fund a lavish lifestyle, US prosecutors said in closing arguments Wednesday.

"He regarded his depositors' money as his personal piggy bank," prosecutor William Stellmach told jurors in Houston, Texas, accusing Stanford of buying up regulators and bank examiners to keep his 20-year-long fraud going.

"Even his own employees had no idea he had systemically stolen more than two billion dollars of his depositors' money to fund his own pet projects and failing businesses," Stellmach said.

"He only disclosed about 20 percent of the bank's true assets to them," he added.

Stanford faces up to 20 years in prison if convicted of 14 counts of fraud, money laundering, conspiracy and obstruction.

The 61-year-old has pleaded not guilty to bilking 30,000 investors from more than 100 countries through bogus investments with Stanford International Bank.

The mustachioed ex-tycoon has spent the past three years in jail after being deemed a flight risk shortly after his February 2009 arrest.

Badly beaten in a jailhouse brawl, the flamboyant Texan was temporarily declared unfit for trial after he became addicted to painkillers while also on antidepressants.

He tried to have his case completely dismissed after claiming that the beating and drugs destroyed his memory, but a judge refused to believe him.

Stellmach, who accused Stanford of holding himself above the law, opened his summation by asking jurors if they thought it was okay to lie.

"That's what this trial is about, after all. After you review all the evidence, all the documents, all the talk, it really boils down to Allen Stanford's lies," he said.

The prosecutor also dismissed defense claims that star witness and former chief financial officer James Davis perpetrated the entire fraud, of which Stanford insists he was an innocent victim.

"So Davis, the guy who's supposedly running this thing, made publicly announced plans to walk away and retire to his 12-foot aluminum fishing boat, and left Stanford, the victim, to cruise the Caribbean in his 112-foot luxury yacht?" Stellmach questioned.

"Davis must have been one heck of a philanthropist to go to all that trouble to only steal 14 million dollars, while letting his boss get away with more than two billion."

Stellmach also reviewed Stanford's general disdain for his what he characterized as his "gullible" investors.

He reviewed government exhibits showing slick, colorful brochures full of false numbers and reassurances of safety on certificates of deposit that provided higher rates of return than those available in the United States.

The prosecutor quoted testimony from a former Stanford employee who stated that after one such bogus brochure was printed and distributed, sales went up sharply, much to Stanford's delight.

Jason Green, a former top salesman with the company, testified that after one such meeting Stanford bragged: "It's amazing what people will risk just to earn an extra two percent."

Investigators could not find 92 percent of the $8 billion the bank said it had in assets and cash reserves.

Stanford's defense team was due to present their closing arguments after lunch, with jurors to start deliberations later Wednesday.

A self-described "maverick," Stanford hit international sports headlines by creating the eponymous Stanford Super Series Twenty20 cricket competition in 2005.

The $20 million winner-take-all match appalled many of the sport's followers by challenging cricket's traditional set up.

In Antigua, he was the island's largest employer and the recipient of a 2006 knighthood, but after the allegations against him surfaced, much of his support dwindled and the England and Wales Cricket Board severed ties with him.

Read more on:    allen stanford
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