Stanford arraigned in federal court on $7 billion Ponzi scheme fraud allegations.
Houston, TX(JusticeNewsFlash.com)—Houston-based Stanford Financial Group’s (SFG) former financier, R. Allen Stanford and participating conspirators were arraigned Friday June 19, 2009 for their alleged involvement in a $7 billion investment fraud scandal. The U.S. Securities and Exchange Commission (SEC) http://www.sec.gov reportedly referred to the case as a “massive Ponzi scheme”.
According to court documents and prosecuting attorneys, Stanford committed this Ponzi scheme by paying old investors with the money received from new investors. Apparently assets were acquired by selling Stanford International Bank certificates at falsely guaranteed high interest returns.
The Texas billionaire was charged in federal court in Richmond, Virginia, on Friday, and will be sent to Texas for his detention hearing.
This particular case started around February 17, 2009, when the SEC accused Stanford of approximately $7 billion in fraudulent transactions. The next morning, over 600 account holders quickly withdrew their money from the Stanford International Bank (SIB) in St. John’s, Antigua.
According to a press release issued by the United States Department of Justice http://www.usdoj.gov, current federal charges include “1 count of conspiracy to commit mail, wire and securities fraud, 7 counts of wire fraud, 10 counts of mail fraud and 1 count of conspiracy to commit money laundering”. R. Allen Stanford, Laura Pendergest-Holt (Stanford Financial Group’s (SFG) chief investment officer), and Leroy King (chief executive officer of Antigua’s Financial Services Regulatory Commission) have also been charged with conspiracy to obstruct an SEC proceeding. As reported by the Los Angeles Times, Leroy King accepted over $100,000 in bribes from Stanford in exchange for satisfactory reports on audits, misinforming U.S. investigators. At this time, Stanford will appear in federal court in Houston, on June 24, 2009 according to Bloomberg’s coverage on Stanford’s $7 billion fraud case.
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