Stanford Fraud Trial Resumes Following Illness Interruption

By Laurel Brubaker Calkins - Feb 22, 2012

R. Allen Stanford’s criminal fraud trial resumed today after testimony was halted yesterday afternoon when the defendant became ill.

Stanford, 61, reoccupied his place at the defense table in federal court in Houston, coughing frequently and deeply. The financier’s coughing worsened by midday, when the jury broke for lunch. The trial is in its fifth week.

Stanford is fighting charges he swindled investors of more than $7 billion through what prosecutors claim was a Ponzi scheme built on allegedly bogus certificates of deposit at his Antigua-based Stanford International Bank Ltd. He has been incarcerated as a flight risk since being indicted in June 2009.

This week, jurors are hearing from expert witnesses testifying on Stanford’s behalf.

John Mezzanotte, who has conducted dozens of feasibility studies for Caribbean resorts, told jurors that the billionaires-only resort Stanford was developing on Antigua had been started years earlier by a Chinese multimillionaire. The other developer lost his funding in 2003, and later sold the property to Stanford.

Inflating the Value
Prosecutors accuse Stanford of inflating the value of that island property by more than 5,000 percent to make it appear he was recapitalizing his bank in late 2008. U.S. securities regulators found more than $5 billion missing from the bank’s investment accounts when Stanford’s operations were seized on suspicion of fraud in February 2009.

Mezzanotte described the property Stanford selected for the resort as unique for its beauty, pristine nature and protected harbor.

“There are only a couple of them in the Caribbean,” he testified.

Under questioning by prosecutors, Mezzanotte said Stanford’s island resort had no paved roads, utilities or buildings when he last saw it.