By Terri Langford
Wednesday, March 7, 2012
Jurors who convicted R. Allen Stanford of fraud heard Wednesday how $330
million of investors' money went to his international accounts and to help
buy two luxury homes for his mistress.
The jurors are considering a U.S. Justice Department move to go after
foreign bank accounts linked to Stanford. Although the 14-count indictment
against him described the government's intention to seek the forfeitures,
jurors didn't know until they convicted Stanford on 13 counts Tuesday that
they would stay to hear the forfeiture motion.
The jury convicted Stanford of running a $7 billion investment fraud using
certificates of deposit issued by his Stanford International Bank in the
Caribbean nation of Antigua. The CDs were marketed to customers of companies under the umbrella of Houston-based Stanford Financial Group.
After testimony ended Wednesday afternoon in the forfeiture hearing before
U.S. District Judge David Hitter, prosecutors argued that CD funds from
Stanford International Bank ended up in accounts the government wants to
seize. Jurors will deliberate starting Thursday morning.
"There's no doubt, no dispute that the money came from Stanford
International Bank," Justice Department lawyer Andrew Warren told jurors.
The only witness in the hearing was U.S. Postal Inspector Clayton Gerber,
who described how 29 bank accounts contained funds from Stanford clients who invested in Stanford International Bank CDs.
"The entire source of funds were CD depositors' money," Gerber said.
In closing defense arguments, lawyer Ali Fazel zeroed in on Gerber's
testimony that he did not know the origin of the accounts' deposits before
2000, suggesting that some of the funds could have come from other sources
than CD investors.
"They want you to assume these are CD monies, all of it," Fazel told jurors.
The U.S. Securities and Exchange Commission shut down Stanford's operations
in February 2009, and a court-appointed receiver seized U.S. assets of his
international financial network.
The bank accounts the jury is reviewing now were in other countries.
Gerber's testimony included tracing funds from investors' CDs to the
purchase of two Florida homes for Rebecca Reeves-Stanford, the mother of two of Stanford's six children. Despite the hyphenated name, she and Stanford were not married, and Stanford never has divorced his first wife.
According to previous testimony, CD funds in Stanford International Bank
were transferred to his Swiss bank account. Gerber described a series of
nine transactions starting in 2002 by which $11 million moved from the Swiss account into one of Stanford's JPMorgan Chase accounts in Houston.
From there, more than $1 million was wired to help pay for Reeves-Stanford's luxury home in Boca Raton, Fla.
Three years later, the Boca Raton home was sold and proceeds were used to
buy another home for Reeves-Stanford in Key Biscayne, Fla.
In May 2009, three months after the receiver seized Stanford's U.S. assets,
the Key Biscayne house sold for $2.54 million. Of that, $2.5 million went to a bank in the Cook Islands and into an account called "Baby Mama Trust,"
which listed Reeves-Stanford as the sole beneficiary.
A few months later, about $1.5 million went from there to an Isle of Man
bank account and $1 million to a Swiss bank account.
The government contends that the Baby Mama Trust account and the 28 others
contained CD proceeds taken unlawfully from investors.
Stanford's investor victims eventually could get a share of whatever assets
are recovered through the receivership or forfeiture, although they would
get far less than they lost.
According to trial testimony, much of investors' money went to Stanford's
yachts, beachfront estates and other luxuries, or to pet business operations.
Showing posts with label reeves. Show all posts
Showing posts with label reeves. Show all posts
Thursday, 8 March 2012
Monday, 5 April 2010
Stanford losses may be greater than estimated
Nearly 14 months into his search for billions of dollars collected by jailed Texas promoter Robert Allen Stanford, a court-appointed receiver is not releasing state-by-state figures for victims and losses.
That receiver, Dallas lawyer Ralph S. Janvey, is responsible for locating and seizing as many Stanford assets as possible for eventual distribution to Stanford’s investors.
Janvey estimated early last year that Stanford’s alleged frauds had drained approximately $7.2 billion from at least 21,500 investors in Louisiana, other states and other nations.
But federal court filings by the Internal Revenue Service in Dallas last month raise the possibility the actual numbers are substantially higher. And a former Baton Rouge federal prosecutor said Saturday that may be the case.
Janvey and five of his receivership attorneys did not respond to calls and e-mails requesting current state-by-state numbers for both investors and losses.
Instead, Kristie Blumenschein, an employee of Janvey’s law firm, replied: “I regret to inform you that we do not currently have that information in publishable form.”
Blumenschein added that she does not know when such information would be available to the public.
Last month, the IRS obtained a federal court subpoena for all names and addresses of Stanford investors that Janvey has in his receivership records.
In support of the request for subpoena power, the IRS included a 36-page declaration from Revenue Agent Daniel Reeves.
Reeves noted that billions of dollars earmarked for Stanford International Bank on the Caribbean island of Antigua included the individual retirement accounts of thousands of people.
But Reeves added that two confidential sources who had worked for Stanford Group Co. reported much higher numbers of IRA accounts than Janvey.
Reeves quoted those sources as reporting that Stanford Group Co. sold bank certificates of deposit “to 3,000 – 3,500 IRA holders which were administered in the U.S. through Stanford Trust in Baton Rouge.”
Reeves added: “Ralph Janvey, the U.S. receiver, reported recently that there may have been 1,480 IRA holders.”
Baton Rouge attorney Ed Gonzales represents 16 Lafayette-area investors who lost money to Stanford.
But Gonzales formerly worked as an assistant U.S. attorney, prosecuting white-collar criminals.
Gonzales said the difference between the IRA numbers reported by Reeves’ sources and those reported by Janvey may be due to different sets of records.
“The difference could be explained to some degree by variation between on-the-books transactions and off-the-books transactions,” Gonzales said.
“Why would Allen Stanford do that?” Gonzales mused in reference to a possible second set of books. “There are all sorts of reasons if you’re a crook.
“The brokers who sold this stuff … may have had a more accurate knowledge of how much money was being taken in,” than Janvey, Gonzales said. “They may have been doing more business than Janvey has seen.
“The inference is that more people have been hurt more badly than has been talked about,” Gonzales said.
“The fact is we need to know how much money was really lost,” Gonzales said. “At a minimum, we need to know what Janvey thinks was lost.”
Release regret?
Angela Shaw, who founded the Stanford Victims Coalition in the Dallas area last year, said she coaxed a state-by-state loss estimate from the receivership in October.
That estimate shows $2.66 billion in losses to 7,072 investors inside the United States.
The state-by-state breakdown is dated Feb. 22, 2009. And the top three states are listed as:
(1) Florida, 2,409 investors, $857.2 million in losses.
(2) Louisiana, 1,810 investors, $561.3 million in losses.
(3) Texas, 1,290 investors, $582.9 million in losses.
But Baton Rouge lawyer Phillip W. Preis represents more than 100 Stanford investors in the Baton Rouge area. And Preis said he stands by his South Louisiana loss estimate of $1 billion.
In Dallas, the receivership’s Blumenschein would not acknowledge the figures produced by Shaw.
“The 7,072 investors and $2.66 billion figures that you cite are not facts that are confirmed or verified at this time, so we cannot say that such figures are accurate,” Blumenschein said.
In Fort Worth, Texas, Rose Romero, regional administrator for the Securities and Exchange Commission, said the SEC’s current U.S. loss figure is $2.66 billion.
In Baton Rouge, Gonzales noted that Stanford’s former chief financial officer, James M. Davis, of Baldwyn, Miss., has pleaded guilty to conspiracy and fraud charges and agreed to testify against Stanford. Other former Stanford employees may also have been granted immunity in return for accurate information about the Stanford operation and its losses, he added.
Much of that information must be made available to Stanford, who is in custody in Houston, awaiting trial in January, Gonzales added.
That receiver, Dallas lawyer Ralph S. Janvey, is responsible for locating and seizing as many Stanford assets as possible for eventual distribution to Stanford’s investors.
Janvey estimated early last year that Stanford’s alleged frauds had drained approximately $7.2 billion from at least 21,500 investors in Louisiana, other states and other nations.
But federal court filings by the Internal Revenue Service in Dallas last month raise the possibility the actual numbers are substantially higher. And a former Baton Rouge federal prosecutor said Saturday that may be the case.
Janvey and five of his receivership attorneys did not respond to calls and e-mails requesting current state-by-state numbers for both investors and losses.
Instead, Kristie Blumenschein, an employee of Janvey’s law firm, replied: “I regret to inform you that we do not currently have that information in publishable form.”
Blumenschein added that she does not know when such information would be available to the public.
Last month, the IRS obtained a federal court subpoena for all names and addresses of Stanford investors that Janvey has in his receivership records.
In support of the request for subpoena power, the IRS included a 36-page declaration from Revenue Agent Daniel Reeves.
Reeves noted that billions of dollars earmarked for Stanford International Bank on the Caribbean island of Antigua included the individual retirement accounts of thousands of people.
But Reeves added that two confidential sources who had worked for Stanford Group Co. reported much higher numbers of IRA accounts than Janvey.
Reeves quoted those sources as reporting that Stanford Group Co. sold bank certificates of deposit “to 3,000 – 3,500 IRA holders which were administered in the U.S. through Stanford Trust in Baton Rouge.”
Reeves added: “Ralph Janvey, the U.S. receiver, reported recently that there may have been 1,480 IRA holders.”
Baton Rouge attorney Ed Gonzales represents 16 Lafayette-area investors who lost money to Stanford.
But Gonzales formerly worked as an assistant U.S. attorney, prosecuting white-collar criminals.
Gonzales said the difference between the IRA numbers reported by Reeves’ sources and those reported by Janvey may be due to different sets of records.
“The difference could be explained to some degree by variation between on-the-books transactions and off-the-books transactions,” Gonzales said.
“Why would Allen Stanford do that?” Gonzales mused in reference to a possible second set of books. “There are all sorts of reasons if you’re a crook.
“The brokers who sold this stuff … may have had a more accurate knowledge of how much money was being taken in,” than Janvey, Gonzales said. “They may have been doing more business than Janvey has seen.
“The inference is that more people have been hurt more badly than has been talked about,” Gonzales said.
“The fact is we need to know how much money was really lost,” Gonzales said. “At a minimum, we need to know what Janvey thinks was lost.”
Release regret?
Angela Shaw, who founded the Stanford Victims Coalition in the Dallas area last year, said she coaxed a state-by-state loss estimate from the receivership in October.
That estimate shows $2.66 billion in losses to 7,072 investors inside the United States.
The state-by-state breakdown is dated Feb. 22, 2009. And the top three states are listed as:
(1) Florida, 2,409 investors, $857.2 million in losses.
(2) Louisiana, 1,810 investors, $561.3 million in losses.
(3) Texas, 1,290 investors, $582.9 million in losses.
But Baton Rouge lawyer Phillip W. Preis represents more than 100 Stanford investors in the Baton Rouge area. And Preis said he stands by his South Louisiana loss estimate of $1 billion.
In Dallas, the receivership’s Blumenschein would not acknowledge the figures produced by Shaw.
“The 7,072 investors and $2.66 billion figures that you cite are not facts that are confirmed or verified at this time, so we cannot say that such figures are accurate,” Blumenschein said.
In Fort Worth, Texas, Rose Romero, regional administrator for the Securities and Exchange Commission, said the SEC’s current U.S. loss figure is $2.66 billion.
In Baton Rouge, Gonzales noted that Stanford’s former chief financial officer, James M. Davis, of Baldwyn, Miss., has pleaded guilty to conspiracy and fraud charges and agreed to testify against Stanford. Other former Stanford employees may also have been granted immunity in return for accurate information about the Stanford operation and its losses, he added.
Much of that information must be made available to Stanford, who is in custody in Houston, awaiting trial in January, Gonzales added.