Stanford Used His Antigua Bank As His Personal Cash Machine Alleges U.S Prosecutor

Category: Island Talk Created on Saturday, 03 March 2012 10:50

A U.S prosecutor has accused Allen Stanford of using his Antigua based bank as "his own personal ATM” and "flushed" investor money away on failing businesses, yachts and cricket tournaments.

These statements were made by Justice Department lawyer, William Stellmach, at the close of Stanford’s five-week investor fraud trial in Houston, Texas. 

According to Stellmach, "If Stanford's customers knew what he was really doing with their money, they wouldn't have bought certificates of deposit issued by the bank."

he further went on to state that Stanford's lies grew more brazen in 2008 as the financial crisis sapped his Stanford International Bank of the new investments needed to keep the alleged scheme afloat. 

When "the death knell" sounded, Stellmach said, the institution scrambled to cover its daily operations as Stanford sought to derail a US probe into his business dealings.

"The man sitting at that table executed a scheme for 20 years to line his pockets with billions of other people's money," Stellmach said. He "presented a false vision of the bank and the risks he was planning to take with their money."

The 61-year-old Stanford is charged with using his Houston-based financial empire to swindle investors out of more than $7 billion. He has pleaded not guilty to a 14-count indictment. 

At the heart of Stanford’s alleged fraud are certificates of deposit sold by his Antigua-based Stanford International Bank Ltd to about 28,000 investors.

The defense responded that prosecutors built their case on the claims of a false witness: Stanford's former chief lieutenant, Jim Davis, who had cut a deal with the prosecution.

They argued it was Davis who had committed a fraud at the expense of Stanford, whom they characterized as an absentee owner.

"There was no deceit and this man is not guilty," defence lawyer Ali Fazel said in his closing argument. "There is no evidence ... none that Mr Stanford cheated anyone. It's not there."

"Reasonable doubt, I submit to you, belongs to the defendant," said Fazel. "I ask that you don't surrender it for expediency."

"It's the bank's money, they can invest it however they wish," Fazel's co-counsel, Robert Sardine, said. "It just wasn't the depositors' business to know how it was invested."

"It is ironic" that prosecutors talked about lies, "when the key witness in this case has got to be one of the biggest liars you've heard about," Scardino said.

Scardino said depositors' money was put in valuable companies and was properly disclosed. 

He said the bank was pressured by the financial crisis, but Stanford had a plan to save it that ran aground only because US regulators intervened.

Stanford faces maximum sentences of 20 years in prison.

"The defendant is presumed by law to be innocent," U.S. District Judge David Hittner said in jury instructions. Jury deliberations began just before 4 pm on Wednesday