Posted: 20 June 2009 0024 hrs
WASHINGTON: Texan billionaire financier and cricket mogul Allen Stanford and four others were Friday charged with 21 counts of fraud, money-laundering and obstruction in a huge eight-billion-dollar scam.
The five -- including Stanford's chief investment officer Laura Pendergest-Holt, and Leroy King, head of Antigua's financial services regulatory commission -- were accused of masterminding a decade-long scheme.
In a 50-page indictment, the Department of Justice also charged accountants Mark Kuhrt and Gilberto Lopez who worked for Stanford-affiliated companies, showed the scam dated back to September 1999 and continued until about February 17 this year.
Stanford was scheduled to appear in a federal court later Friday after surrendering to the FBI, officials said.
A grand jury in Houston, Texas has been investigating Stanford Financial Group, whose headquarters in the city were raided in February by federal authorities when the sprawling financial empire collapsed.
The company's assets were also frozen, along with the wealthy cricket mogul's personal accounts.
The Securities and Exchange Commission (SEC) has charged that Stanford operated a "massive Ponzi scheme" by paying investors returns on deposit certificates using money from other investors rather than any investment gains.
"Instead of buying the safe and sound investments he promised his clients, Stanford bought Antigua's top securities cop," said Robert Khuzami, Director of the SEC's Division of Enforcement in a statement, referring to King.
"While Stanford quarterbacked his massive Ponzi scheme, he paid the referee to spy on the huddles and provide an insider's play-by-play of the SEC's investigation."
Pendergest-Holt was the first Stanford executive to face criminal charges, indicted on May 12 on two counts of obstruction of justice before facing the additional charges brought on Friday.
Stanford's case is the most high-profile alleged fraud scheme since the SEC charged Wall Street financier Bernard Madoff in a 50-billion-dollar pyramid scheme in December. Madoff has pled guilty and faces a maximum 150 years in jail.
When the allegations against Stanford first surfaced, investors swarmed his closed offices and affiliated banks across the United States, Europe, Latin America and the Caribbean desperate to recover their investments.
Several governments seized Stanford banks and froze their assets concerned the global reach of the billionaire's banking operations could complicate the return of an estimated 50 billion dollars in assets belonging to an estimated 50,000 clients in 140 countries.
"Phony financial statements, fabricated performance numbers, and sham audits are at the heart of Stanford's fraudulent scheme that swindled billions of dollars from investors worldwide," said Rose Romero, regional director of the SEC's Fort Worth office, on Friday.
But in April, a tearful Stanford, 59, had denied any wrong-doing. "Baloney. Baloney... It's not a Ponzi scheme. If it was a Ponzi scheme, why are they finding billions and billions of dollars all over the place?" he told ABC News.
Born in rural Mexia, Texas, he now sports the clipped mustache and Saville Row style of English aristocracy.
Stanford was the man behind the eponymous Stanford Super Series Twenty20 cricket competition, which culminated with his team of hand-picked Caribbean Superstars last year defeating England at his own ground on the Caribbean island state of Antigua and Barbuda.
The England and Wales Cricket Board cut ties with him after the allegations surfaced.
Stanford was knighted in 2006 by the governor-general of Antigua, where his company was the second-largest employer.
- AFP /ls
From ChannelNewsAsia.com; see the source article here.
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