HOUSTON, Tue Jun 19, 2012 – Laura Pendergest-Holt, former chief investment officer for Allen Stanford, has agreed to plead guilty and receive a three-year prison sentence for her role in a $7 billion fraud, Bloomberg reported, citing three people familiar with the matter.
Earlier this month, former billionaire Stanford was sentenced to 110 years in prison for running the fraud in which he stole money from his investors to finance an extravagant lifestyle in the Caribbean.
Pendergest-Holt will plead guilty to a single obstruction of justice charge, Bloomberg said.
Pendergest-Holt was indicted on obstruction of justice charges and conspiracy charges related to her allegedly false testimony to the U.S. Securities & Exchange Commission, which was investigating the fraud.
The U.S. Justice Department and Pendergest-Holt’s lawyers could not be reached for comment outside regular U.S. business hours.
HOUSTON, Thu Jun 14, 2012 – Allen Stanford, the former Texas billionaire convicted of a $7 billion Ponzi scheme, was sentenced to 110 years in prison by a U.S. federal judge on Thursday.
Stanford, who was found guilty of 13 felony counts of fraud and conspiracy by a Houston jury in March, used fraudulent certificates of deposit issued by his offshore bank in Antigua to bilk thousands of investors out of their savings.
He blamed the U.S. government for ruining his business and said he never intended to defraud anyone.
“They destroyed it and turned it to nothing,” Stanford said in federal court in Houston, where he was found guilty last March of fraud and conspiracy. “Stanford was a real brick-and-mortar global financial empire.”
Stanford spoke haltingly and appeared to struggle to control emotion at the sentencing hearing. Prosecutors have asked for a sentence of 230 years, arguing in court papers that Stanford’s crime was “one of the most egregious frauds in history.” His attorneys have asked for a sentence of about three years, or the same amount of time Stanford has been in federal custody.
HOUSTON, Mon Jun 4, 2012 – The government said it would be “impracticable” to enforce an order of restitution against financier Allen Stanford to victims of his estimated $7 billion Ponzi scheme and that it should be permitted to compensate fraud victims with forfeited assets.
In a Monday filing with the federal court in Houston, the Department of Justice said the large number of victims, the difficulty of calculating their losses and the freezing of Stanford’s assets in various jurisdictions would make restitution difficult.
A federal jury on March 6 convicted Stanford, 62, on fraud, conspiracy and obstruction charges over what prosecutors called the sale of bogus certificates of deposit from his Antigua-based Stanford International Bank Ltd.
Stanford is scheduled to be sentenced on June 14 and could spend the rest of his life in prison. The jury also found that federal authorities should try to seize $330 million of frozen funds that Stanford stashed in 29 foreign bank accounts.
Once considered a billionaire, Stanford later claimed to be indigent.
The Justice Department said restitution would be complicated because customer accounts were credited with $1.3 billion of interest that was not paid and some customers but not others withdrew “fictitious” interest or principal from their accounts.
It said it has agreed in principle with the U.S. Securities & Exchange Commission on a joint distribution process.
The Justice Department also said a receiver winding down parts of Stanford’s business will to ensure fairness try to calculate “net” amounts lost by each investor. Such an approach is also being used in the winding down of Bernard Madoff’s firm.
HOUSTON ― Financier Allen Stanford is suffering from brain injury and memory loss, witnesses said on Wednesday at a hearing on whether the accused swindler can stand trial.
Stanford is accused of defrauding his investors with a $7 billion Ponzi scheme. His lawyers argue he is not competent to go to trial because a jailhouse fight has left him with severe memory loss.
“Mr. Stanford is not competent to stand trial today,” said forensic psychologist Victor Scarano, one of three doctors who testified for the defense on Wednesday.
On Tuesday, a prison psychologist testified that Stanford was competent.
The hearing goes into a third day on Thursday. Judge David Hittner, who must decide whether Stanford’s trial on fraud charges can go ahead as scheduled on Jan. 23, said he would make a quick decision. Stanford has pleaded not guilty to the charges.
Stanford, 61, sat quietly at the defense table during Wednesday’s proceedings. Hittner allowed his handcuffs to be removed so he could take notes to communicate with his lawyers.
While Scarano testified that Stanford would be unable to analyze documents in a fraud trial, Assistant U.S. Attorney Gregg Costa noted that Stanford had been able to file a lawsuit against the government during the time doctors said he was incompetent.
Stanford “fooled investors for 20 years. Why couldn’t he fool a few doctors,” Costa said.
Stanford once owned luxury homes in the Caribbean, Houston and Miami. He was arrested in June 2009 and has been indicted on charges of fraud, conspiracy and money laundering stemming from the alleged Ponzi scheme. A Ponzi scheme is a fraud in which existing investors are paid with the deposits of newer ones.