Stanford, Allen - Sentenced to 110 Years in Jai...
R. Allen Stanford Sentenced to 110 Years in Jail in Fraud Case
By CLIFFORD KRAUSS - June 14, 2012
R. Allen Stanford is shown arriving at the courthouse in Houston for sentencing on Thursday.
HOUSTON —R. Allen Stanford, the Texas financier convicted of fleecing 30,000 investors from 113 countries in a $7 billion Ponzi scheme, was sentenced on Thursday to 110 years in jail.
A defiant Mr. Stanford, in a rambling statement to the court before the sentencing, intermittently fought back tears and shuffled papers, and said, “I’m not up here to ask for sympathy or forgiveness. I’m up here to tell you from my heart I didn’t run a Ponzi scheme.”
He blamed the government for the collapse of his businesses and asserted that “we could have paid off every depositor and still have substantial assets remaining.”
In response, federal prosecutor, William J. Stellmach, called Mr. Stanford’s version of events “obscene.”
“This is a man utterly without remorse,” Mr. Stellmach said. “From beginning to end, he treated all of his victims as roadkill.”
“He went after the middle class, including people who didn’t have money to lose. People have lost their homes. They have come out of retirement.”
A federal jury in March convicted Mr. Stanford of 13 out of 14 counts of fraud in connection with a worldwide scheme over more than two decades in which he offered fraudulent high-interest certificates of deposit at the Stanford International Bank, which was based on the Caribbean island of Antigua.
Prosecutors argued that Mr. Stanford had consistently lied to investors, promoting safe investments for money that he channeled into a luxurious lifestyle, a Swiss bank account and various business deals that almost never succeeded.
Mr. Stanford’s defense lawyers pleaded for a sentence effectively of time served because of the three years he spent in prison waiting for his trial. Prosecutors recommended 230 years, the maximum according to sentencing guidelines for his crimes of conspiracy, wire and mail fraud, obstruction and money laundering. He was acquitted of one count of wire fraud.
The prosecutors heavily relied on James M. Davis, Mr. Stanford’s former roommate from Baylor University, who served as his chief financial officer. Mr. Davis testified that the Stanford business empire was a fraud, complete with bribes paid to Antiguan regulators and schemes to hide operations from federal investigators. He described how Mr. Stanford had sent him to London to send a fax to a prospective client from a bogus insurance company office to reassure him that his investment would be safe.
For Mr. Stanford, the verdict and sentencing represented the end of a remarkable career that began with a Texas fitness club venture. After it went bankrupt, he tried offshore banking and lived a life of glamour. Mr. Stanford is now a shadow of the swaggering financier who only three years ago had an estimated fortune of over $2 billion, a knighthood awarded by Antigua and a collection of yachts and a fleet of jets. He even owned his own professional cricket team and stadium on Antigua, which according to prosecutors he treated like his personal business haven in the West Indies, with politicians in tow, through bribes and political campaign contributions.
The defense denied those charges, basing its case on the fact that Mr. Stanford’s clients had been paid on schedule until the Securities and Exchange Commission made the first accusations three years ago, destroying the value of his businesses. His lawyers repeatedly pointed out that his investment literature said a loss of principal was possible and that Mr. Stanford’s assets still had value when his businesses were shut down by the federal government. They argued that Mr. Davis had often acted without Mr. Stanford’s knowledge.
In his testimony, Mr. Davis portrayed his former boss as a bullying manager who manipulated him to lie and cheat investors. He described how Mr. Stanford had invited him to drive with him in his new Mercedes-Benz on a highway outside Houston and floored the accelerator until the car reached 170 miles an hour. “He instilled intimidation and fear,” Mr. Davis said.
It took three years to bring Mr. Stanford to trial because he was severely beaten in a 2010 brawl with another federal inmate in a prison outside Houston and then became addicted to prescription antistress drugs. He underwent a year of therapy before United States District Court Judge David Hittner ruled that he was fit to stand trial. The defense said he could not properly defend himself because he had lost much of his memory.