US billionaire Stanford charged with $7-billion fraud

20 June 2009

Texas financier Allen Stanford, accused by the US Securities and Exchange Commission (SEC) of running a ''massive, ongoing fraud,'' was charged with $7 billion fraud by the US prosecutors yesterday.

Also charged in a 21-count indictment was Leroy King, ex-head of the Antigua and Barbuda Financial Services Regulatory Commission (who was expelled yesterday from the post), Gilbert Lopez, the chief accounting officer at Stanford Group, Laura Pendergest-Holt, Stanford's chief investment officer, who was previously charged with obstruction, and Mark Kuhrt, Stanford's former global controller.

Stanford, 59, faces charges of conspiracy to commit securities, mail and wire fraud. The SEC said King helped Stanford conduct a Ponzi scheme in exchange for bribes.

According to the SEC, Stanford's investment firm made "improbable and unsubstantiated'' claims about its ability to generate "safe" returns of more than 10 per cent, while also misleading investors of their exposure to Bernie Madoff's alleged Ponzi scheme (See: A run on Stanford's Antiguan bank as US authorities cry fraud).

The SEC sued Stanford and two aides on 17 February, accusing them of misleading investors  in certificates of deposit in Antigua-based Stanford International Bank. (See: Missing billionaire accused of fraud found by FBI).

Stanford was arrested June 18 in Fredericksburg, Virginia, at his girlfriend's home.