The Justice Department announced this afternoon that Texas billionaire R. Allen Stanford and several of his top executives have been indicted on fraud and obstruction charges by a U.S. grand jury. Justice also brought charges against a top financial regulator in Antigua for conspiring to aid Stanford’s fraud.
The indictment follows civil charges filed by the SEC in February against Stanford and other executives of Stanford Financial Group and Antigua-based Stanford International Bank for allegedly orchestrating a multibillion-dollar Ponzi scheme.
In addition to Stanford, the indictment--returned yesterday by a Houston grand jury--charged Stanford Financial Group’s chief investment officer, chief accounting officer, and global controller with fraud.
Among other accusations, the Justice Department alleges that Stanford and his executives falsely claimed that Stanford International Bank’s assets increased by more than $7 billion between 2001 and 2008, when in reality, $5 billion of those assets consisted of notes on loans to Stanford and overstated interests in "island properties."
Stanford, chief investment officer Laura Pendergest-Holt, and Leroy King, the former chief executive officer of Antigua’s Financial Services Regulatory Commission, were also charged with conspiring to obstruct an SEC investigation.
"The Department of Justice will vigorously root out and expose financial crimes that wreak havoc on innocent investors," said Lanny Breuer, assistant attorney general of the criminal division in a statement. "These difficult economic times make the mission of the Department all the more important."
The SEC, which charged Stanford, Pendergest-Holt, and Stanford International Bank’s chief financial officer James Davis in its original complaint, amended its case today to also include civil charges against King, Stanford Financial Group’s chief accounting officer Gilberto Lopez and global controller Mark Kuhrt.
The SEC says King took monthly bribes to ignore Stanford’s Ponzi scheme and to provide Stanford with details about the SEC’s investigation. “Stanford bought Antigua’s top securities cop,” said SEC Enforcement Director Robert Khuzami in a statement.
Stanford surrendered to the FBI yesterday in Stafford, Va., and is expected to appear in federal court in Richmond today. Stanford has maintained his innocence.