- The Washington Times - Saturday, June 20, 2009

R. Allen Stanford - the Texas billionaire who became an Antiguan knight and had a fleet of private jets - used bribes, bogus land deals and outright lies to fleece investors out of billionsof dollars, much of which will never be recovered, authorities said Friday.

Mr. Stanford, 59, and six others were charged Friday in a case that alleges at least 10 years of deceit and a $7 billion Ponzi scheme.

One of those charged is Leroy King, the former head officer of Antigua’s Financial Services Regulatory Commission, who authorities say accepted hundreds of thousands of dollars worth of bribes from Mr. Stanford in exchange for creating phony reports that made the scam appear legitimate.

Mr. Stanford was charged in a 21-count indictment, including conspiracy to commit wire fraud, mail fraud and securities fraud, conspiracy to obstruct justice and conspiracy to commit money laundering. He faces a total of 375 years in prison, an attorney in the case said in court.

“Stanford’s investors were simply looking for safe investments and low-risk opportunities. And with Stanford they thought they had found such an opportunity,” said Robert Khuzami, director of enforcement for the Securities and Exchange Commission. “But what they had actually found was a complicated array of phony financial statements, fabricated performance and sham audits, all to create the illusion of safety and liquidity.”

Mr. Stanford appeared Friday in federal court in Richmond, where U.S. Magistrate Judge M. Hannah Lauck ordered him held without bond. Mr. Stanford agreed to be brought to Houston, where the criminal charges against him were filed.

Mr. Stanford was arrested Thursday evening by FBI agents in Stafford, Va. His lawyer, Dick DeGuerin, said he was in the state to meet with lawyers.

“The present insolvency of the Stanford companies was caused by the SEC’s heavy-handed actions, which have destroyed and continue to destroy much of the value of the Stanford companies and consequently the interests of the investors,” Mr. DeGuerin said.

According to the indictment unsealed Friday, Mr. Stanford lied to customers about the value of their investments and promised impossibly high returns. Authorities say more than half of his companies’ $8.5 billion in claimed assets were actually notes on loans to Mr. Stanford and inflated real estate deals.

Assistant Attorney General Lanny Breuer said that in one case Mr. Stanford made a “a round-trip real estate transaction” in which one of his companies bought “$63 million in Antiguan real estate last June, only to sell the undeveloped property through Stanford control entities back to itself, claiming its value this time, at the end of last year, to be in excess of $2 billion.”

Mr. Stanford, who was knighted in the former British colony of Antigua where he holds dual citizenship, is a well-known bankroller of cricket and tennis tournaments. He has given hundreds of thousands of dollars to U.S. politicians from his personal fortune, estimated at $2.2 billion.

Also charged Friday with helping Mr. Stanford perpetrate the fraud were four top company officials - James M. Davis, Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt.

While the other three were charged in the same indictment as Mr. Stanford, Mr. Davis was charged separately through a document known as “criminal information,” which indicates a plea deal is likely.

“Mr. Davis will continue to cooperate with the investigation, and we’ve been answering questions posed by the Department of Justice and FBI as recently as today,” Davisdefense attorney David Finn said. “And at Allen Stanford’s trial, the jury, and the entire world, will see that the orchestrator and prime beneficiary of the Stanford fraud was Sir Allen Stanford himself.”

Another Stanford employee - Bruce Perraud - was charged in a separate indictment with destroying company documents that a federal judge ordered preserved as part of the SEC’s investigation.

According to court documents, Mr. Perraud hired a shredding company to destroy the documents less than a week after the judge’s order.



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