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Business

Financier Stanford found guilty of $7 billion Ponzi scheme

Text by News Wires

Latest update : 2012-03-06

Texan financier and cricket tycoon Allen Stanford faces up to 20 years in prison after being found guilty on Tuesday of perpetrating a $7 billion Ponzi scheme that swindled 30,000 people in over 100 countries.

AFP - Financier and cricket mogul Allen Stanford was found guilty of perpetrating a $7 billion Ponzi scheme, a US jury declared Tuesday.

The mustachioed ex-tycoon had pleaded not guilty to bilking 30,000 investors from more than 100 countries through bogus investments with Stanford International Bank.

Jurors found him guilty of 13 of 14 counts of fraud, conspiracy, money laundering and obstruction of justice which carry maximum sentences of up to 20 years in jail.

Stanford, 61, has spent the past three years in jail after being deemed a flight risk shortly after his February 2009 arrest.

Badly beaten in a jailhouse brawl, the flamboyant Texan was temporarily declared unfit for trial after he became addicted to painkillers while also on antidepressants.

He tried to have his case completely dismissed after claiming that the beating and drugs destroyed his memory, but a judge refused to believe him.

Defense attorneys at trial tried to shift the blame to former chief financial officer James Davis, who he said perpetrated the entire fraud while Stanford naively placed his trust in his former college roommate.

They also insisted that the bulk of investor money was lost due to mismanagement by court-appointed receivers after the US government seized the bank.

Prosecutors scoffed at the notion, and said Stanford funded his lavish lifestyle by siphoning off $2 billion in investor deposits while pushing "bogus" certificates of deposits which promised artificially high returns based on "safe" investments.

Investigators could not find 92 percent of the $8 billion the bank said it had in assets and cash reserves.

As a dual citizen of the United States and the Caribbean country of Antigua and Barbuda, Stanford was known for conspicuous largesse, especially on the two paradise islands.

In the West Indies he created the Stanford 20/20 Cricket tournament which, in 2008, captured a global television audience of 300 million.

With a fortune of $2.2 billion, Forbes Magazine ranked Stanford as the 605th richest person in the world in 2006. After most of those funds were frozen by the courts, Stanford was forced to accept appointed counsel.

But his personal fiefdom began to crumble when it attracted scrutiny from US financial regulators and he was charged by the US Securities and Exchange Commission (SEC) with fraud in February 2009 and arrested a few months later at his girlfriend's home in the US state of Virginia.

In Antigua, Stanford was the island's largest employer and the recipient of a 2006 knighthood, but after the allegations against him surfaced, much of his support dwindled and the England and Wales Cricket Board severed ties with him.

Date created : 2012-03-06

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