Allen Stanford guilty of setting up $7bn Ponzi scheme
Allen Stanford, the Texan financier who promised to pour millions of pounds into English cricket, has been found guilty by a US court of orchestrating a $7bn (£4.5bn) Ponzi scheme.
After four days of deliberations and a month-long trial, a Houston jury on Tuesday found Stanford guilty of 13 of the 14 charges he faced. The verdict came after the jury on Monday told a US district judge they could not reach a unanimous verdict on all counts. The jury found Stanford not guilty of one count of wire fraud.
The verdict marks a dramatic fall from grace for Stanford, who was estimated to be worth more than $2bn in 2008. Lauded in Antigua, where his bank was based, Stanford had emerged as a major figure in world cricket.
US prosecutors claimed that Stanford orchestrated a scheme that promised investors high returns if they bought certificates of deposit from Stanford International Bank (SIB). Rather than invest the money in safe assets, the government said the Texan used $2bn of it to fund an opulent lifestyle that included yachts and a private jet.
As the verdict was read to the court, Stanford, who had denied the charges, mouthed to his family members in court: "It's OK."
The trial pitted Stanford against James Davis, his former university room-mate and chief financial officer of Stanford Financial Group. Mr Davis was the chief witness for the prosecution after striking a plea bargain.
"Mr Davis provided jurors with a clear road map and his testimony was devastating," commented Andrew Stoltmann, a US attorney specialising in financial crime. Defence lawyers maintained that Stanford's business was a legitimate one.
US efforts to prosecute Stanford, who was charged in 2009, suffered a setback in November of that year when the financier was badly beaten up by a fellow prisoner at a detention facility in Texas. After a year in which lawyers for Stanford claimed the attack had damaged his memory, Judge David Hittner ruled late last year that the trial should go ahead.
When Stanford was first charged, it caused acute embarrassment in the English Cricket Board's headquarters at Lord's, where the former billionaire landed in a helicopter in June 2008 to promote a game between the West Indies Stanford Superstars and the England team. That discomfort was echoed in Antigua, where Stanford became the first American to be given a knighthood by the island in 2006. He was later stripped of the honour.
The trial, which began in late January, was closely followed by the more than 20,000 people who invested money with SIB. The investors, who were drawn largely drawn from the Caribbean, Latin America and the US, have not seen any of their money returned.
"We do expect an appeal," said Mr Ali Fazel, Stanford's attorney, adding he expects sentencing to take place in several months.