CaribWorldNews, WASHINGTON, D.C., Fri. June 19, 2009: Sir Allen Stanford once held command of a multi-billion dollar empire, doled out millions to raise his public image as a sports enthusiast and for him, Caribbean heads of state were just a phone call away. But on Friday, Stanford was indicted on charges he helped direct a $7 billion fraud and ordered held without bail.
The Texas-born, Antigua citizen was indicted along with five others including a former Antiguan regulator in a 21-count indictment including one count of conspiracy to commit mail, wire and securities fraud; seven counts of wire fraud; ten counts of mail fraud; and one count of conspiracy to commit money laundering.
Also charged in an indictment returned in Houston yesterday and unsealed today was Laura Pendergest-Holt, 35, SFG’s chief investment officer; Gilberto Lopez, 66, SFG’s chief accounting officer; Mark Kuhrt, 37, SFG’s global controller; and Leroy King, 63, the former administrator and CEO of Antigua’s Financial Services Regulatory Commission.
Federal prosecutors told U.S. Magistrate Judge Hannah Lauck that Stanford and his alleged co-conspirators put the `integrity of the markets` at risk.
Stanford, 59, was arrested Thursday in Fredericksburg, Virginia, at his girlfriend’s home. He was led away in leg irons by two U.S. marshals yesterday bound for Texas.
According to the indictment, Stanford and his co-defendants engaged in a scheme to defraud investors who purchased approximately $7 billion in certificates of deposit administered by Stanford International Bank Ltd. (SIBL), an offshore bank controlled by Stanford and located on the island of Antigua.
`Stanford and his co-defendants allegedly misused and misappropriated most of those investor assets, including diverting more than $1.6 billion into undisclosed personal loans to Stanford himself, while misrepresenting to investors SIBL’s financial condition, its investment strategy and the extent of its regulatory oversight by Antiguan authorities,` said the Justice Department.
Also according to the indictment, Stanford, Pendergest-Holt and King conspired to conceal the fraud from the U.S. Securities and Exchange Commission (SEC) in order to fend off an SEC investigation.
King allegedly provided Stanford and others with confidential information that he had received from an official SEC inquiry into a possible fraud on investors by SIBL so that additional false representations concerning SIBL’s financial health and Antiguan regulatory oversight could be made. In addition, Stanford, Pendergest-Holt and others allegedly agreed that Pendergest-Holt would provide false information to the SEC about the true value of SIBL’s investment portfolio.
The indictment also charges Stanford, Pendergest-Holt, and King with conspiracy to obstruct an SEC proceeding. The indictment seeks forfeiture of the proceeds of the fraud from all defendants, including forfeiture of specific foreign bank accounts controlled by Stanford, Davis and Pendergest-Holt.
Also unsealed Friday was a criminal information charging James M. Davis, 60, SFG’s chief financial officer, with conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct an SEC investigation. The information seeks forfeiture of up to $1 billion in fraud proceeds. Davis will make his initial appearance on these charges in Houston in the near future.
Additionally, also unsealed was an indictment returned in the Southern District of Florida charging Bruce Perraud, 42, a former SFG Global Security Specialist, with destruction of records related to a federal investigation. Perraud allegedly ordered and supervised the destruction of numerous SFG documents housed at SFG’s Fort Lauderdale, Fla., office after he was put on notice that a federal court had ordered the preservation of SFG documents in connection with an SEC investigation and lawsuit. Perraud was arrested in the area of Naples, Fla., yesterday morning and will make his initial appearance in the near future.
`The Department of Justice will vigorously root out and expose financial crimes that wreak havoc on innocent investors,` said Lanny A. Breuer, Assistant Attorney General of the Criminal Division.
`Investors need access to accurate and truthful financial information in order to make decisions about how to invest their hard-earned savings. Their savings, and indeed the integrity of our capital markets, are jeopardized when investors are deceived. These difficult economic times make the mission of the Department all the more important.`
Stanford has maintained his innocence.