Stanford Investors Sue Antigua, Caribbean Central Bank

By Laurel Brubaker Calkins (Bloomberg)

R. Allen Stanford’s receiver and investors’ committee sued Antigua, the Eastern Caribbean Central Bank and 23 former Stanford Financial Group Co. executives over allegations they aided the financier’s $7 billion fraud.

The Official Stanford Investors Committee seeks repayment of at least $90 million in documented loans Stanford made to the dual-island nation of Antigua and Barbuda and accuses its elected officials of having been “Stanford’s partners in crime.” The nation’s leaders shielded Stanford’s scheme and traded choice real estate for as much as $230 million in loans that haven’t been repaid, according to the lawsuit.

“Antigua knowingly provided necessary assistance to Stanford’s $7 billion Ponzi scheme and, in exchange, received millions of dollars in loans whose repayment terms Stanford did not enforce,’’ the committee said in a complaint filed in Dallas federal court on Feb. 15. “For well over a decade, Antigua was a prime participant in, and beneficiary of, the Stanford Ponzi scheme, and actively protected and shielded Stanford’s criminal enterprise from real regulatory scrutiny.’’

Stanford, 62, was convicted in March of masterminding a Ponzi scheme that defrauded investors through the sale of bogus certificates of deposit at his Antigua-based Stanford International Bank Ltd. He is serving a 110-year sentence in a Florida federal prison as he appeals his verdict and sentence.

Falsified Audits

Evidence at Stanford’s trial showed he bribed Antiguan banking regulator Leroy King to falsify audits certifying the bank’s investment returns and mislead U.S. securities regulators investigating the former Texas billionaire’s operations. Stanford was also allowed to underwrite and participate in banking reform legislation that Antigua claimed had cleaned up its corrupt offshore banking industry, according to trial evidence. Antigua has so far failed to extradite King to face criminal charges in the U.S.

The investors on Feb. 15 separately sued the Eastern Caribbean Central Bank, which nationalized Stanford’s other island financial institution, the Bank of Antigua, after the U.S. Securities and Exchange Commission seized Stanford’s enterprise on suspicion of fraud in February 2009.

The ECCB in turn parceled out ownership in the bank to the government of Antigua and to other Caribbean banks in what the investors called “a second act of brazen thievery.” The head of ECCB’s monetary council at the time was Antiguan Minister of Finance Errol Cort, who was both King’s supervisor and one of Stanford’s personal attorneys, according to court papers.

‘Rightful Owners’

“The considerable value of the Bank of Antigua, believed to be in the tens or hundreds of millions of dollars, should be distributed as compensation to its rightful owners, Stanford’s victims and creditors,’’ the committee said in court papers.

Recent comments by Antiguan elected officials indicate the country intends to repay the bank instead of the defrauded investors, Peter D. Morgenstern, a lawyer for the investors’ committee, wrote, meaning that “in essence, Antigua intends to use CD investors’ money to pay itself.’’

Tom Bayko, Antigua’s attorney, didn’t immediately respond to voice or e-mail messages seeking comment on the lawsuit. In an earlier suit, Bayko said Antigua was protected from such litigation by foreign sovereign immunity.

Officials at the ECCB didn’t immediately return telephone or e-mail messages seeking comment on the lawsuit.

Ralph Janvey, Stanford’s court-appointed receiver, filed another lawsuit on Feb. 15 claiming breach of fiduciary duty lawsuit by 23 former directors and officers of Stanford’s operations, including three executives convicted of furthering the fraud scheme. The suit seeks return of all compensation from these individuals, some of whom have been previously sued by the receiver on similar claims.

“Many directors and officers simply looked the other way, while others actively assisted Stanford in defrauding thousands of people out of billions of dollars,’’ Kevin Sadler, Janvey’s lead lawyer, said in the filing in Dallas federal court. They “put their continued employment and substantial compensation ahead of the best interests of the entities they were hired to serve,” he said.

The cases are The Official Stanford Investors Committee v. Antigua and Barbuda, 3:13-cv-0760; The Official Stanford Investors Committee v. Bank of Antigua, 3:13-cv-0762; Janvey v. Alvarado, 3:13-cv-0775. All are in U.S. District Court, Northern District of Texas (Dallas).





For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/ 

The Stanford International Victims Group Forum

Allen Stanford: From Billionaire to Inmate

By Jeanine Ibrahim | CNBC
The case of Allen Stanford, a former billionaire who once allegedly sealed a deal with blood and is currently serving a 110-year federal prison sentence, could soon be back in the headlines. A federal judge ruled last month that investors could proceed with a lawsuit that alleges the Securities and Exchange Commission (SEC) was negligent in its handling of the fraud.

 Texas-born Robert Allen Stanford exuded wealth. At his height in 2008, he was one of the richest men in America, listed on the Forbes 400, and worth an estimated $2.2 billion.

He defined conspicuous consumption. In one three year period alone, he spent $100 million on aircraft, which included helicopters and private Lear Jets. He even spent $12 million lengthening his yacht by just 6 feet.
As it happened, however, Stanford indulged in these perks with ill-gotten gains. In early 2009, the scale and scope of Stanford's extravagances finally caught up to him.
Stanford was eventually convicted of selling fraudulent certificates of deposit from his offshore bank on the island of Antigua in an international $7 billion Ponzi scheme, a case that drew comparisons to disgraced broker Bernie Madoff's multibillion dollar fraud. To date, none of the more than 20,000 investors he bilked have recovered any money.
In their lawsuit, the investors claim that on four instances and as early as 1997, the SEC determined that Stanford was running a Ponzi scheme. Still, the agency did not act accordingly and failed to notify the Securities Investor Protection Corporation. Investigators did not bring charges against Stanford until 2009, in the wake of the global financial crisis.

The government moved to dismiss the case, but U.S. District Judge Robert Scola rejected the motion. He ruled that if the SEC knew Stanford was running a Ponzi scheme as alleged by plaintiffs, the agency was obligated to report it. Scola added that the government could argue that it did not know Stanford was running a fraud if and when the case moved to summary judgment.
SEC spokesman John Nester declined to comment to "American Greed." Nonetheless, the attorney for the investors, Gaytri Kachroo, said the ruling was significant. "It truly provides the investing public a precedent and therefore the hope that a case against the SEC can succeed if meritorious under the law," the lawyer said.

 A Conman's Bogus Empire of Epic Proportions
Beyond fancy toys, Stanford bought a small island for $63 million. He owned mansions in Houston, Antigua, and St. Croix. And in Coral Gables, Fla. an enormous 18,000 square foot castle. It was fit for a king: the property included 57 rooms, a tower and a moat. Yet after just one year of living there, he grew tired of the sprawling estate - moving out and having it demolished.

He also loved the game of cricket. By 2008, he was considered the world's number one promoter of the sport, even offering up a $20 million cash prize, the largest ever for a team sporting event, for a match in London.

Yet according to the U.S. Attorney's office, Stanford was not playing with honest money. He got it by siphoning off loans to himself, approximately $2.2 billion from depositor's CD holdings, without ever revealing these loans to investors.

From Brash Texan to Big Money Banker
Stanford grew up in a small town 90 miles south of Dallas. Much like his home-state, everything about the man was Texas-sized.

Doug Birdsong, who used to workout with Stanford, recalled him as a muscular man, standing 6'5" and weighing about 330 pounds. "He was the biggest, he was the best, and he was the boss," Birdsong told "American Greed."

His early business ventures ended in failure. After losing a string of health clubs to bankruptcy in 1982 and racking up $13 million in personal debt, Stanford took a few more stabs at entrepreneurship before heading to the Caribbean, where he first entered banking.
He founded "Stanford International Bank" in 1991 on Antigua. It was there that he laid the foundation of his empire, becoming the island's largest employer.
He targeted wealthy Latin Americans worried about the stability of their governments, and it worked. Within three years, the bank's assets skyrocketed to $350 million.

One year later, he moved into the U.S. market, establishing Stanford Financial Group in Houston. The company became known for selling certificate of deposits (CDs). Synonymous with safety, CDs seemed like a smart choice for potential buyers. As Stanford's investors piled into these instruments, in less than a decade the group grew to $3 billion.

Unwitting investors, however, had no idea that Stanford's CDs were anything but safe.

A Scam from the Start

Yet suspicions rose in 2005 when SEC investigators began taking a hard look at Stanford Financial Group, specifically his Certificates of Deposit from Antigua. Three years later, when two whistleblowers came forward, the agency was handed hard proof of Stanford's fraud.
Assistant U.S. Attorney Paul Pelletier got the case from the SEC. He landed a huge break when Jim Davis - Stanford's right-hand man since the 1980's and the company's chief financial officer - agreed to talk in exchange for a reduced sentence.
Davis confessed that from his first day on the job, the company simply made up numbers and cooked the books. "That's what his job was as CFO, and he continued to do that from 1987 or '88 all the way until 2009," Pelletier said.

When they first started the business, Davis said Stanford could do whatever he wanted on Antigua. He had the island's chief banking regulator in his back pocket. In a bizarre twist, the two even sealed a bribery scheme deal by becoming "blood brothers," cutting their fingers to mix their blood, according to Davis.

A decade-and-a-half after Stanford Financial Group first opened its Houston headquarters, the SEC shut its U.S. operations down. In June 2009, Stanford was mired in charges of fraud, conspiracy to launder money and conspiracy to obstruct justice.

Throughout his trial, however, the former high-flying billionaire steadfastly maintained his innocence. He attempted to put the blame on Davis, but a jury did not buy his story. This March, he was found guilty on 13 counts, and later sentenced to more than a century in prison.

Investors Devastated by Economic Homicide
Many of the investors at the sentencing were satisfied, with Sandra Dorrell being one of them.
In 2005, after selling off an office furniture business, she invested her money in the Stanford Group's CDs. A single mother who was battling a rare, life-threatening condition called Caroli's disease, she had planned to use her investment to give her peace of mind and financial security as she endured medical treatment.
Instead, she lost every penny.
"To lose $1.3 million to someone that absolutely stole the money from me is just horrific," Dorrell told CNBC's "American Greed."
Fellow investor Cassie Wilkinson, who along with her husband lost six-figures to Stanford's treachery, agreed.
"The sentencing for crimes like this has become so big and so long that they're comparing it to economic homicide, and really, that's what it is," she said. "Someone murdered the life that I knew, that I worked hard for. We were not born with money; we earned every single penny," Wilkinson added.
For 62-year-old Stanford, a projected release date of 2105 is a life sentence -one that he deserves, according to many of his victims.

King wants review of PM's extradition warrant

By Martina Johnson - Wednesday, April 4th, 2012.

ST JOHN'S, Antigua - Prime Minister Baldwin Spencer has issued a warrant
ordering the extradition of the former Financial Services Regulatory
Commission (FSRC) boss Leroy King to face trial in the US on several charges related to the Allen Stanford US $7 billion Ponzi scheme.

However, King's lawyer has filed a constitutional motion in the High Court,
seeking a declaration that certain aspects of the Extradition Act are
discriminatory and asking for judicial review of the Prime Minister's
decision, among other things.

The parties named in the motion are Attorney General Justin Simon, QC and
Spencer.

In the latest challenge, the lawyer noted that sections 12 and 13 of the Act deprive King of the opportunity to appeal a High Court ruling which ordered his committal to be delivered to the US.

About two weeks ago, the Court of Appeal struck down an application to
appeal the order. The decision of the appeal justices hinged on the
aforementioned sections of the Act.

Another point made in the motion is that any warrant issued by the PM should have been deemed "invalid and unlawful and of no effect so far as it
violates King's right to the protection of the law."

King's lawyer has asked the court to give an ear to the claim for constitutional redress simultaneously with his application for judicial
review of the prime minister's decision.

Lastly, the attorney will be seeking, "a conservatory order staying all
extradition proceedings in respect of (King) until the determination of
(the) motion ."

Should King succeed in his legal challenges, he wants to be awarded legal
costs.

This is King's fourth attempt to bar his extradition since he first appeared in the magistrates' court three years ago.

The US government indicted King on over 20 charges alleging wire, mail and
securities fraud and conspiracy to commit money laundering, among others.

However, the local courts committed him for trial on 11 of those counts.

The Allen Stanford Story Doesn't End With The Guilty Verdict

Thursday, March 15, 2012 Chattanoogan.com

Prominent local attorney, Lee Davis, offered several interesting comments on the Allen Stanford trial and the recent "guilty" verdicts handed down on 13 of 14 charges of criminal conduct. This sordid story does not end with these verdicts, not hardly.

A mere piker compared to Madoff,s roughly $68 billion Ponzi scheme, Stanford and his cronies fleeced investors around the globe for approximately $7 billion.

But far more damage lies beneath the surface of this oil spill of greed and avarice. Where were the federal regulators? Missing in action? Where were the Antiguan authorites? Bought and sold? Numerous complaints and reports given to various federal agencies, the SEC, FINRA and NASD, fell upon blind eyes and deaf ears. In fact, one of FINRA's district directors, Bernerd Young, became managing director of Compliance for the Stanford firm. Leroy King, former director of Antigua's Financial Regulatory Commission, stands indicted on many related charges, but has yet to be extradited.

Many doubt that Baldwin Spencer, Antigua's Prime Minister, will sign the extradition order. His vocal pledges of cooperation are at odds with his inability to act on the matter. As with the Madoff aftermath, various federal agencies are feuding and finger pointing, the victims are struggling to recover lost funds and wondering who, if anyone, cares about their rights and losses. This ain't cricket.

Judge Hitner has invited Victim Impact Statements

Judge Hitner has invited Victim Impact Statements from any victims. If you are a victims and feel that Stanford should get the maximum jail time then please write to Judge Hitner.

Victims should send a Stanford trial impact statement to Judge David Hittner, US Courthouse,
515 Rusk Ave, Room 8509,
Houston, TX 77002

Let's get as many letters out as possible and let's make this sure he never gets out of prison.

Kate

Stanford Victims Group Wants Life Sentence

Wednesday, 07 March 2012 02:30 Caribarena news Antigua News - Latest

Antigua St John's - Kate Freeman, spokesperson for the Stanford
International Victims Group, said Tuesday's guilty verdict against R Allen
Stanford in a US$7 billion Ponzi scheme is a "good result for the victims,"
and the "first positive thing" in the last three years.

She has now called for the American government to face up to its part in the situation and find ways to help the victims.

Freeman said the 21,000 investors were pleased that a jury considered all
the facts and agreed that the victims were "misled and lied to by Allen
Stanford".

She noted that the American government was aware of the fraud for years, but did nothing to stop it.

"Had they acted sooner, then it would have saved a lot of people a lot of
money," Freeman said. "It would have saved a lot of people from losing their life savings. I'm glad that the jury agreed with the 21,000 victims."

She noted that there was some confusion about how long Stanford could serve
behind bars, with speculation ranging from 20 years overall to 20 years for
each count.

Whatever the situation, Freeman said, "Let's hope he is locked up for the
rest of his life. He deserves it. He sentenced thousands of innocent victims to a life of hardship and poverty.

Most of the people that he stole from were retired people, and they have no
chance of ever recovering the money that they have lost. And they will never recover from what happened to them."

The spokeswoman noted that the next step is for Antigua to "sort out" the
extradition of Leroy King, since "he needs to face his own trial" along with James Davis, Laura Pendergest-Holt, and others.

"They all need to go and face their own trial. And hopefully they'll all be
put away," Freeman said.

In a statement, the Victims Group said Stanford showed no compassion or
consideration for them, and deserves no compassion or mercy from the court
when he is sentenced.

Meanwhile, local attorney Hugh Marshall Jr has said that it is a
"wait-and-see" situation at this point, since sentencing and a forfeiture
proceeding must take place to determine what would be forfeited, aside from
Stanford's bank accounts. This would provide a better perspective on what
will be available for the victims.

Marshall maintained that the first order of business in handling any money
recovered from Stanford's assets would be channeled into operations and the
payment of severance to thousands of employees.

Stanford's conviction does little to ease investors' struggle

By Loren Steffy

As U.S. District Judge David Hittner was about halfway through reading the
jury's verdict - "count seven, mail fraud, guilty; count eight, mail fraud,
guilty" - R. Allen Stanford turned to family members sitting in the
courtroom and mouthed the words "it will be OK."

It's more reassurance than Stanford's 21,000 victims have gotten.

Investors in Stanford's $7 billion fraud waited three years for this day,
when justice was finally served on the man who had cost them what for many
were life savings.

"This has been a long time coming, and it gives all of the victims a small
amount of satisfaction," said Kate Burnell-Freeman, the co-founder of the
Stanford International Victims Group. "He deserves life in prison. He has
sentenced thousands of victims to a life of hardship and poverty, and I just hope that the U.S. courts remember that."

Yet for Burnell-Freeman and the thousands of investors her group represents, the wait goes on. Any comfort from the verdict quickly gives way to the stark reality of their plight. Stanford's conviction does little to help them recover even a smidgen of their investments.

"I would have been happy to see Stanford walk if somebody that same day gave me my money back," said Burnell-Freeman, who lives in Antigua, the Caribbean nation where Stanford had his bank.

The fate of investors remains tied to two protracted court cases.

One involves the arcane rules regarding insurance coverage for U.S.
brokerage clients, who represent about a third of all Stanford investors
worldwide.

The Securities Investor Protection Corp. has argued it shouldn't have to pay for the losses, because even though Stanford's certificates of deposit were sold as securities through a SIPC-member brokerage, they were actually CDs from a foreign bank.

The Securities and Exchange Commission has filed suit to force SIPC to pay,
and the matter has been pending before a federal judge in Washington since
late last year.

Jury has work to do

Meanwhile, the Houston jurors who convicted Stanford just before lunch
reconvened Tuesday afternoon to consider whether Stanford must forfeit a
series of bank accounts spread among the U.K., Canada and Switzerland
containing an estimated $330 million.

Spread among all the investors, it's a pittance - investors will be lucky to recover a few pennies on the dollar - but the accounts represent some of the biggest pools of cash found in the three years since the collapse of
Stanford's financial empire.

The conviction ought to allow the money to be recovered for investors. The
problem is those funds also are embroiled in a jurisdictional dispute
between the U.S. Justice Department and Antiguan liquidators for Stanford's
bank.

Jurors will resume their consideration of the forfeiture issue today.

Both the U.S. government and the liquidators are attempting to return money
to investors, using different legal processes.

A court-appointed receiver in Dallas, charged with recovering assets for
investors, estimated that as of Oct. 31, including the foreign bank accounts and money that was donated to U.S. politicians that hasn't been returned, no more than about $1 billion could be recovered - less than one-seventh of the value of the fraud.

So far, the receiver hasn't returned anything to investors.

Ravaged hopes, dreams

As is so often the case in investment scams, justice comes far too late to
help those hurt most profoundly by the fraud. Stanford's conviction may
reassure investors that, at least, they weren't crazy. Their money really
was stolen, and Stanford's firm was designed to deceive them. But that
reassurance is overshadowed by the stunning reality that out of the $7
billion, only a few hundred million at best is likely to be returned to
them.

The hard-earned money of thousands became the fuel by which Stanford
propelled himself into the international jet set of swanky cricket tourneys, Caribbean islands, and private planes. The realization that their hard work was wasted on one man's greed is that wound that can't be healed by Tuesday's conviction.

"Without recovery for the Stanford victims there really cannot be any
closure," said Linda Kornswiet, an investor in Blue Bell, Pa. "The sad part
is the thousands of victims who still struggle to pay their bills, lost
their homes and also struggle to pay medical expenses. He has destroyed the
hopes and dreams of thousands of retirees."

For them, as it has for the past three years, the waiting continues.

Stanford Indictment

Just to remind everyone what they are seeking a verdict on, here is the indictment made against Stanford.
If you read through the charges it would seem almost impossible that he could be found not guilty on any of them.

Kate

Stanford Indictment

PM: King extradition a work in progress

ST JOHN'S, Antigua - Prime Minister Baldwin Spencer, who also holds the External Affairs portfolio, is awaiting a response from Leroy King to determine how he will proceed with an extradition request from the United States government.

The United States Securities and Exchange Commission charged King, former head of the Financial Services and Regulatory Commission (FSRC), with 21 counts relating to wire, mail and securities fraud and conspiracy to commit money laundering.

The charges relate to an alleged $7 billion Ponzi scheme said to have been masterminded by R Allen Stanford.

High Court judge Mario Michel, last week, upheld a 2009 committal order for King to be extradited.

The ruling placed the matter in Spencer's hands, under his external affairs mandate.

Spencer said he has followed the steps in the Extradition Act by writing to King.

OBSERVER understands this was done last Friday. The law gives King 15 days to respond.

"There are some preliminary steps that have to be taken in that regard. The individual has to be written to, informing him that the courts have ruled in a particular way and that he should be given some time to respond to that.

"He may have reasons that he wishes to advance as to why he probably should not be extradited. According to the law that process has to take place.

"I have done the initial thing - that is to write to him indicating certain things and to request of him to respond. It's at that point I will have the opportunity to make the final determination," Spencer said.

The prime minister declined to comment on the Stanford trial, which began on January 24 and which has already heard testimony from witnesses, at home and abroad, about how the Texan exerted influence on those who should have been the gatekeepers.

Spencer was cautious, saying that he, like the rest of the world, is waiting to "see how things unfold."

"I am not in a position to make any judgment or assessment of the situation," he said.

Stanford, once the largest private sector employee in Antigua, was charged with 21 federal criminal counts. He pleaded not guilty to a revised 14-count indictment and said that if his company was involved in any illegal activity, it was the fault of his former chief financial officer, James Davis.

Davis, the prosecution's star witness, has pleaded guilty to three counts:
conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct an SEC investigation.

Regulator recalls Stanford's job offer

By Terri Langford
Thursday, February 9, 2012

The day after Paul Ashe took a post as a bank regulator in Antigua, R. Allen
Stanford called him with an offer for a job that would make him "a very
happy man" for the rest of his life, Ashe testified Thursday in Stanford's
fraud trial.

Ashe, supervisor of international banks for Antigua's Financial Services
Regulatory Commission, indicated he quickly ended the conversation with
Stanford in February 2008, did not know what job Stanford was proposing and
didn't follow up.

Later that year, Ashe participated in an examination of Stanford
International Bank in the Caribbean island nation and eventually came to
doubt the accuracy of its financial reports.

He also described panic among depositors in February 2009, when a U.S.
lawsuit against the bank's parent company, Houston-based Stanford Financial
Group, froze the assets of all Stanford properties.

"It was total chaos. The customers were screaming for their money," Ashe
told the jury in U.S. District Judge David Hittner's court.

Stanford, 61, a Mexia native, is accused of running a $7 billion investment
scam, largely through certificates of deposit issued by Stanford
International Bank.

Among the allegations are that investors were told the bank passed muster
from regulators and an independent auditor, and that an auditor and
regulator received bribes in exchange for those favourable reports.

Ashe said that he served during part of the tenure of the regulator accused
of taking bribes, Leroy King, former head of the Financial Services
Regulatory Commission.

Super Bowl tickets

Ashe testified he was unaware of under-the-table cash payments or gifts of
Super Bowl tickets King is accused of taking and said that Antiguan law
prohibits regulators from accepting gifts worth more than $50.

King is charged in a separate indictment, along with three Stanford
Financial officials, all to be tried later.

Ashe also described his own efforts to examine the bank in his official
capacity.

He said that after weeks of "hardball" from the bank resisting meetings with
regulators, a team of half a dozen met with bank officials in September
2008.

"We wanted to see how Stanford International Bank was actually making its
money," Ashe said. He said he was surprised by the paucity of documents
detailing oversight by the bank's board.

He also said he was concerned by loans from the bank to Stanford, which he
wasn't sure were supported by the cash reserves required under Antiguan law.


According to testimony by previous witnesses, the bank loaned Stanford
millions of dollars for his personal use and business ventures, even though
investors in the CDs were told their deposits were invested conservatively
and not used for such lending.

Fleet and estate

Jurors also got a description Thursday of Stanford's luxurious life, as a
personal assistant described his fleet of vessels and estate in St. Croix,
U.S. Virgin Islands.

"He always liked having the best," said Kelly Taylor, who, along with her
then-husband, worked for Stanford for several years. At one point their
tasks included overseeing the $13 million renovation of the Sea Eagle, a
106-foot yacht Stanford purchased for $4 million and extended to 112 feet.

The two-year renovation in the Netherlands began in 2003, Taylor said. She
and her husband spent time there, and Stanford visited at least once to
inspect the progress.

Stanford's other vessels included a 180-foot rescue tug that Stanford bought
to support the Sea Eagle, a 55-foot "weekend boat," and a 30-foot fishing
boat, Taylor said.

Difficult boss

She described Stanford as a difficult boss, and said she and other employees
jokingly referred to their jobs as "stand by to stand by" because they
always were on call to respond to his often-changing demands.

She also detailed quirks including his insistence that dry cleaning be sent
from St. Croix to Florida or Texas, and that water be shipped in. She said
she once was tasked with finding koi of a certain size and colour to stock a pond for a cricket tournament in Antigua.

More from day 13 in court

Stanford Had 100-Foot Ocean Yacht, CFO Settled for 12-Foot Boat

February 09, 2012 By Laurel Brubaker Calkins

Feb. 9 (Bloomberg) -- R. Allen Stanford was portrayed by his ex-finance chief, James M. Davis, as the mastermind and prime beneficiary of what prosecutors said was a $7 billion Ponzi scheme built on bogus certificates of deposit at Stanford's Antiguan bank.

"Who ran the companies, you or Mr. Stanford?" Assistant U.S. Attorney William Stellmach asked Davis, who has been testifying under a plea agreement at Stanford's fraud trial in federal court in Houston. "Who profited overwhelmingly from the conduct you described with the CD money?"

"Mr. Stanford," Davis replied to both questions.

Davis identified a photo of an ocean-going sport yacht as one of several Stanford owned before regulators seized his assets on suspicion of fraud in early 2009. Davis told jurors yesterday he owned a small boat on the pond at his Mississippi farm.

"Mr. Stanford's boat was 100 feet long; your boat was 12 feet long,"
Stellmach asked Davis. "Is that a fair reflection of how this was all divvied up," referring to proceeds each man realized from the alleged Ponzi scheme.

"Yes, that's a fair reflection," Davis told the jury. "Follow the money," he added, pointing across the courtroom at his former boss.

Stanford, 61, has denied all wrongdoing and is fighting charges he misled investors about the safety and oversight of deposits at his bank.
Prosecutors claim Stanford skimmed more than $2 billion to fund a lavish lifestyle and dozens of private companies that ranged from Caribbean airlines and real estate developments to cricket tournaments.

Presented Evidence

Stanford's attorneys presented evidence during the five days Davis spent on the stand trying to paint the ex-CFO as a thief who stole millions of dollars from Stanford's operations and ran the companies with little input from his boss.

"He had his finger on the pulse," Davis testified yesterday, repeating previous assertions that Stanford directed him to falsify financial records, lie to Antiguan regulators and bribe bank auditors to conceal Stanford's borrowings and keep investors' cash flowing into Stanford International Bank.

"They were bamboozled by a smoke and mirrors show," Davis said of investors who lost more than $7 billion through Stanford's bank. "We reported to investors one way when in actuality their money was being handled the opposite way."

Bribes to Regulator

Kalford Young, an Internal Revenue Service criminal investigator, also testified yesterday about banking records and internal e-mails he said supported Davis's claim that Stanford bribed Leroy King, then Antigua's top banking regulator, to conceal the fraud. According to the documents, Young said, Stanford gave King thousands of dollars in cash and club-level tickets to National Football League Super Bowl championship games.

Under questioning by Ali Fazel, another of Stanford's lawyers, Young said he didn't know why the financier would document such bribes with a paper trail Fazel described as "big enough for anyone and their mother to find."

"Are you saying Mr. Stanford is bribing someone and copying his lawyer on it?" Fazel asked about e-mails in which Stanford discussed King's tickets.
"He's bribing Mr. King, putting it on his credit card, and having the bill sent to his accountant?"

Stanford leaned forward at the defense table, grinning and chortling quietly as his lawyer questioned the IRS agent.

Under resumed questioning by prosecutors, Young testified that most white-collar criminal cases are built on paper trails. He said investigators obtained Stanford's records after he lost control of the bank.

All Eyes on King

Tuesday, 07 February 2012 02:30 caribarena news Antigua News - police

Antigua St John's - Former head of the Financial Services Regulatory Commission (FSRC) Leroy King is awaiting the final decision from the minister of External Affairs on whether he will stand trial in the United States for mail, wire, and securities fraud, among other offences.

High Court judge Justice Mario Michel dismissed King's judicial review application on Monday and upheld former chief magistrate Ivan Walters'
decision to commit King to be extradited.

The court also denied King's application to have the former chief magistrate's committal order quashed.

King was jointly charged with four others in 2009, including investor R Allen Stanford, and indicted by a US grand jury in Texas.

Michel, during his hour-and-a-half long judgment, said there had been ample evidence before the former chief magistrate to establish a prima facie case for wire fraud.

He pointed to the evidence of former Stanford business partner and associate James Davis, US district attorney Greg Costa, and other documentary evidence.

The judge disagreed with submissions by King's attorney, Dane Hamilton QC, that the case against the former head of the FSRC was unsupported hearsay.

Michel instead agreed with arguments from Director of Public Prosecutions
(DPP) Anthony Armstrong that there was independent evidence detailing King's participation in the alleged fraud.

King's involvement in the matter was evident, according to Michel, by King's own actions and words, in that he defended Stanford International Bank Limited (SIBL) in the face of mounting concerns from the Securities and Exchange Commission (SEC).

Hamilton's claim that the US offences with which King is charged do not have similar offences in Antigua & Barbuda was also dismissed by the court.

Michel said wire fraud is equivalent to obtaining money by false pretence, and added that it is not the offence, but the conduct, that is equivalent.
He said the former chief magistrate did not err in finding that wire fraud and obtaining money by false pretence were extradition crimes.

Conspiracy to pervert the court of justice, as with the US charge, he said, is equivalent to perverting the course of justice in Antigua & Barbuda. Both offences have the same genus and have extra territorial application, Michel ruled. He said Walters' decision on these grounds could not be faulted.

Hamilton made application for bail on King's behalf on Monday, and his client was released on $500,000, with two sureties and a cash deposit of $110,000 required.

King has to report daily to the St John's Police Station, and must not leave his Marina Bay home unless he is accompanied by one of his two sureties.

These were the same terms originally set down by Walters when King first appeared before the court in June 2009.

King is to abide by these conditions until his surrender to US authorities, or further notice.

Prime Minister Baldwin Spencer, as minister of External Affairs, will have the final say in relation to King being sent to the US to stand trial.

Stanford Used Threats, Charm to Influence Antiguan Regulator

By Laurel Brubaker Calkins and Andrew Harris - Jan 31, 2012

An Antiguan judge who is also the island’s top banking regulator told the jury at R. Allen Stanford’s investment fraud trial that he repeatedly tried to influence the agency that oversaw his banking operations there.

Marian Althea Crick said she complained to Antiguan officials shortly after Stanford relocated his bank to the island until the financier was removed as a director of the agency that predated the Financial Services Regulatory Commission, where she is now chairman. She said it was “a clear conflict” to have the owner of a regulated entity participating in the agency that oversees the business.

“It reminded me of a saying we have at home,” Crick, a government witness, testified yesterday in federal court in Houston in the second week of the trial. “It was a classic case of the rat being put in charge of the cheese.”

Stanford, 61, who was indicted in June 2009, is charged with 14 counts including mail fraud, wire fraud and obstruction of a probe by the U.S. Securities and Exchange Commission. He denies the charges.

Crick testified that Antigua’s prime minister told her Stanford wanted her fired after she had a series of public and private disagreements with the financier in the 1990s. She said Stanford even briefly took control of her agency while she was out of the country in 1998, until she got Antigua’s Attorney General to reverse the decision on legal grounds.

Month-Long Trip
In 1999, Stanford paid for office space and placed several of his employees on the official committee tasked with conducting a formal review of Antigua’s international banks, Crick said. In 2001, she said, Stanford urged government officials to send her and an auditor examining Stanford International Bank Ltd. on a month-long trip so that a different auditor could complete the bank’s audit.

Stanford tried charm when threats failed, Crick said. Once, Stanford unsuccessfully tried to upgrade her economy flight to first class for a British banking conference. After another disagreement, when she informed Stanford forcefully that she “was not a yes person” and wouldn’t rubber-stamp his requests, she said, “He held my hand, and looked me straight in the eye and said, ‘You remind me so much of myself.’”

When Crick resigned from the regulatory commission in 2002, she was replaced by Leroy King, whom Stanford is accused of bribing with millions of dollars and tickets to the National Football League’s Super Bowl championship games. When King was accused of complicity in hiding Stanford’s alleged fraud in 2009, the agency removed him and put Crick back in charge.

Crick was scheduled to resume her testimony today.

Stanford swayed regulators

By Terri Langford

An Antiguan banking official told jurors Monday that R. Allen Stanford used his influence to manipulate the island nation's regulators and insert himself into the regulatory process.

"This would be a classic case of the rat being put in charge of the cheese," said Marian Althea Crick, who is board chairman of Antigua's Financial Services Regulatory Commission.

Crick, 59, described a series of run-ins with Stanford and his financial empire, beginning in 1998 when she was hired to be executive director of the commission's predecessor agency - which once included Stanford as a board member.

Crick said she often raised concerns about his position.

"It's a conflict of interest, inappropriate," Crick testified.

Stanford - whose businesses and charities in Antigua gave him such prominence that the nation knighted him - eventually was removed from the commission but still influenced regulators, she said.

In 2001, when the Antiguan regulator announced it was scheduling a review of the bank, Stanford contacted the agency and said he didn't want a certain auditor included in the review.

Immediately, that auditor and Crick were sent on a hastily arranged fact-finding mission about financial operations in other Caribbean countries, Crick said.

By 2002, Crick anticipated she would be fired and resigned. Her successor, Leroy King, is one of four people charged in a separate indictment from the one against Stanford.

King, accused of taking bribes to keep regulatory heat off Stanford's operations, is fighting extradition from Antigua. The other three defendants in that indictment were Stanford Group executives.

Crick returned to the Antiguan regulatory agency in 2009 after the U.S. Securities and Exchange Commission sued to force Stanford's operations into receivership and freeze its assets.

Other testimony Monday, as Stanford's trial entered its second week, concerned billions of bank assets in a mysterious portfolio known as Tier III.

Mark Collinsworth, an executive in the Memphis, Tenn., office of Stanford's international financial network, described to jurors a three-tier structure for the bank's investments.

Prosecutors allege that Stanford customers were led to believe the CDs were invested conservatively, but that the money really went into Stanford's risky business ventures and jet-setting lifestyle.

Collinsworth said he understood that Tier III contained conservative investments such as bonds and blue chip stocks, but that he had no personal knowledge of the portfolio.

He said Tier III accounted for $5.5 billion of the bank's investments in 2008, compared with about $1.5 billion for Tiers I and II combined. Tier 1 contained cash and liquid assets, he said, and Tier II contained more aggressive investments.

Collinsworth said under questioning by Stanford lawyer Ali Fazel that Stanford himself had little involvement with the Memphis office, visiting only twice in the 10 years Collinsworth worked there.

Collinsworth testified that his Memphis-based supervisor, Stanford's chief investment officer, Laura Holt, did not discuss Tier III with subordinates.

According to testimony last week, Holt once said she managed Stanford's entire portfolio. But as investigators closed in on the operation, she told associates she had no knowledge of certain investments.

Holt is one of the three executives indicted separately from Stanford and set for trial later.

Stanford's former chief financial officer, James Davis, pleaded guilty to three felony counts and will testify for the prosecution.

Collinsworth said Holt and Davis hired friends and relatives with little financial background for key positions in the office.

They included a close Davis friend with no experience in the Middle East, hired as an analyst on that region, and a Russian analyst, hired by Holt, who had been born there but left as a child and wasn't familiar with Russia's most profitable companies.

In the Madoff mould?

The fraud trial begins on Monday of Allen Stanford, the billionaire who bankrolled English cricket.

By Stephen Foley (The Independent)

When the Texan financier Allen Stanford swept into English cricket in 2008, landing his helicopter at Lord's and wheeling a chest containing $20m in new banknotes in front of the cameras, traditionalists decried the debasement of the sport by the lure of filthy lucre. What they didn't know then, and what we are about to find out now, is whether Mr Stanford's lucre was indeed filthy.

This weekend, Mr Stanford's lawyers are furiously and reluctantly preparing for the trial that will decide if that $20m, and hundreds of millions or billions more, was the proceeds of a spectacular fraud.

In 14 criminal charges, he is accused of using his business on the Caribbean island of Antigua to perpetrate a $7bn pyramid scheme, an alleged fraud second in size only to that of Bernard Madoff. He was aided, prosecutors say, by a gang of associates who conjured fake investment returns from their imaginations, falsified documents and funnelled cash from Swiss bank accounts to fund his sports sponsorships and his extravagant lifestyle. In the trial's most eye-popping allegation, he is said to have sealed the co-operation of Antigua's chief bank regulator through a bizarre "blood brothers" ritual.

For 20 years, his indictment alleges, Mr Stanford and his co-conspirators solicited deposits from more than 20,000 people across the US and Central and South America and, "contrary to their representations to investors, they misappropriated a significant percentage of the proceeds ... to finance his personal, failing business ventures and for his own use and enjoyment, including personal living expenses, several yachts and private jet airplanes and numerous residences around the world".

"Yes," Mr Stanford had answered, smirking, in one television interview before his arrest, "it is fun being a billionaire – but it's hard work". Just how hard is dealt with in by court documents filed in Houston, which set out the lengths to which Mr Stanford is said to have gone to conceal his alleged fraud – as told to prosecutors by his right-hand man and one-time university roommate, Jim Davis.

"When the chief financial officer flips and agrees to testify for the prosecution, this is extremely bad" for a defendant, says Andrew Stoltmann, a securities attorney who has represented investors in cases against a string of banks and insurers. "Similar situations happened in the Enron trial and the Worldcom trial. Jurors tend to find their testimony to be very persuasive." Whether this will be the case here remains to be seen.

Mr Stanford built a network of testosterone-fuelled salesmen who touted his investment products, Mr Davis claims, in testimony that he will repeat in court during the six-week trial. This sales force hawked fabricated investment data that purported to show a miracle-grow investment strategy at work, while the company's founder creamed off several billion dollars as bogus loans. The $7.2bn Stanford International Bank (SIB) claimed to have built on behalf of its clients was in reality as little as $500m. The alleged co-conspirators at the top of the firm will be tried in the summer, separately, and it remains an open question whether Leroy King will be among them. Mr King is the main reason US regulators' investigations into SIB ran into the sand. He was chief executive of the Antiguan Regulatory Commission, a man the prosecution claims was bought and paid for by Mr Stanford. But Mr King has been fighting extradition from Antigua, saying local banking secrecy laws meant he could not assist US investigations. As part of his plea bargain, Mr Davis claims that Messrs Stanford and King took a "blood oath", sealed by cutting themselves and mingling their blood.

Mr Stanford entered a not guilty plea last week, and has argued before that if there was any illegal activity at his firm, it must have been the work of Mr Davis or his other underlings. His lawyers are also preparing to argue that the firm was solvent, properly investing its monies, and returning cash to anyone who asked – until the federal authorities swooped and destroyed the business.

The charges against Mr Stanford in 2009 caused a sensation. Panicked investors thronged his operations in Antigua, Caracas and Panama City, among other business centres, demanding their cash back. Those who had been lured by the too-good-to-be-true returns of his Antiguan certificates of deposit are still fighting to get back pennies on the dollar.

Mr Stanford's personal decline has been perhaps even more striking than his business losses. Barely three years ago, he was the brash Texan, famed for fathering six children with several women, pictured bouncing the wives and girlfriends of the England cricket team on his knee, and caring not a damn about the outrage he was causing. His $100m Twenty20 sponsorship had made him a giant in the sport.

But as civil and then criminal charges mounted, he appears to have lost his bearings. He was interviewed drunk and weeping on television, protesting his innocence. His fiancée, Andrea Stoelker, told The Independent the couple were "living on the charity of my family". In custody in Texas, he was beaten by fellow inmates so brutally that he sustained brain damage and, claim his lawyers, became addicted to painkillers.

The trial was delayed by a year, but Houston Judge David Hittner ruled this month that Mr Stanford was finally fit to face a jury. His lawyers were still begging to differ last week but they now say their client may even take the stand in his own defence next month.

What will be revealed if he does? Thousands of out-of-pocket investors want to know if they were duped and, if so, whether it was by a Walter Mitty character or a cold and calculating fraudster in the Madoff mould. The trial begins on Monday.

Dramatis personae: Key figures in the trial

The accused, Allen Stanford

The 61-year-old Texan turned his sleepy family finance firm into an offshore powerhouse that dominated Antigua and provided him with the life of a playboy. The England and Wales Cricket Board fawned as he promised to lavish $100m on Twenty20 cricket.

The betrayer, Jim Davis

Mr Stanford's university roommate and his right-hand man as he built his empire. Faced with the prospect of years in prison, Mr Davis, has turned evidence for the prosecution, alleging that the pair plotted to fabricate profits and lure investors.

The judge, David Hittner

Hittner has already declared he will brook no nonsense. He has banned lawyers from talking about the case outside the court, and had no truck last week with the idea Mr Stanford was unfit to face a jury.

The 'conspirator' Laura Pendergest-Holt

The first person to receive a criminal indictment in the case, she was in the front line with the federal authorities came to investigate the alleged pyramid scheme in 2009. She is charged with obstructing their inquiries, as well as helping Mr Stanford dupe his sales staff into believing they were marketing world-beating investment products.

The bank regulator, Leroy King

The prosecution alleges Mr Stanford showered the Antiguan official with bribes, including impossible-to-get tickets to the US Super Bowl and tens of thousands of dollars in cash from Swiss bank accounts, and even swore a blood oath to win his assistance in shielding Stanford International Bank from prying eyes. He says local laws mean he cannot assist the SEC.

Leroy King Appeal Hearing Begins

By Martina Johnson - Friday, December 16th, 2011.

ST JOHN’S, Antigua – After waiting nearly a year for a court to hear his appeal against his extradition committal, lawyers for former Chief Executive Officer (CEO) of the Financial Services Regulatory Commission (FSRC) Leroy King yesterday began oral arguments in the High Court.

King is wanted in the United States for his alleged role in the masterminding of the R Allen Stanford US $7 billion Ponzi Scheme.

Appearing before Justice Mario Michel, King’s lawyers Dane Hamilton QC and Dane R Hamilton argued two main points in support of the application for a writ of habeas corpus in a bid to get the court to quash the earlier decision of former Chief Magistrate Ivan Walters.

King, who was also the FSRC administrator, is accused of 10 counts of conspiracy to commit mail fraud, seven counts of conspiracy to commit wire fraud, conspiracy to commit money laundering and conspiracy to obstruct the Securities Exchange Commission (SEC) as an accomplice to Stanford’s alleged crimes.

The complaint accuses King of conducting sham audits and examinations of Stanford International Bank (SIBL), an offshore bank located in Antigua, in exchange for large sums of money and other bribes while he allegedly made sure that the SEC did not peruse the offshore bank’s investment records.

Hamilton QC contended that some of the crime(s) King is accused of are not crimes under the laws of Antigua & Barbuda and as such he has not committed any offence for which he can be extradited.

He also said if the offences existed under the laws of Antigua & Barbuda it must be stated, expressly, that they are extra-territorial as well.

The appellant’s counsel then questioned how it is that King is before the court for conspiracy to commit various types of fraud when no counterpart has been named.

The senior lawyer dismissed information in witness statements of other persons allegedly or admittedly implicated in the fraud and said they were nothing but unsubstantiated hearsay evidence.

Hamilton spent the entire day addressing the court on the aforementioned issues in addition to others and is expected to resume next Wednesday. After that the Director of Public Prosecution (DPP) Anthony Armstrong would respond.

While the matter is ongoing, King would remain on $600,000 bail with strict orders not to leave his home without being accompanied by one of his sureties.

He must also continue to report to the police station nearest his home every day among other conditions.

Westgate victims still waiting payment a year after Ponzi Schemer went to Prison

Some of you may find this interesting. Just to give you all an idea of how long we may have to wait for any pay-out - once payments have been agreed and once Janvey has got his act together. Read this article and you will see why I am pushing for Grant Thornton to get access to the funds in Canada, Switzerland and the UK. If GT handle this, we will have direct access to them and can push for a speedy pay-out. That aside, we have Richard and 6 other victims on the committee who will make sure that any payment is swift and fair. If the money falls into the hands of Janvey and the committee we will be waiting forever to see a penny of it.

Westgate victims still waiting payment a year
after Ponzi schemer went to prison
FRIDAY, OCTOBER 28, 2011 LAST UPDATED: SATURDAY OCTOBER 29, 2011, 9:39 AM
BY ANDREW TANGEL
STAFF WRITER
THE RECORD

A year ago today, a federal judge sent James Nicholson away to prison for 40 years for running a $140 million Ponzi scheme. Attorneys and forensic accountants who helped recover investors' money have been paid, but the investors who entrusted their money to the former Saddle River hedge fund manager have yet to get back a penny.

Why the holdup? The federal government refuses to say. "You can't get an answer," said Jon Prusmack, a Rockland County businessman who along with his wife lost $13.2 million in the fraud, the second-largest amount lost of Westgate's nearly 400 investors. He's among the investors who have been prodding government officials for answers. "We get a lot of
smokescreen," he said. Nicholson's victims continue to complain of vague, noncommittal answers from the U.S. Attorney's Office in Manhattan, while estimated payment dates keep getting pushed back without explanation.
The U.S. Attorney's Office had previously told The Record it is "committed" to ensuring victims to what they're "entitled to" but did not say when the funds would be distributed. The clerk of court for the U.S. District Court, Southern District of New York, in Manhattan, which the U.S. Attorney's Office said would distribute the funds, would not respond to multiple requests over the phone and in writing. The clerk, Ruby Krajick, didn't respond to requests through a spokeswoman or a requested written inquiry. A call to U.S. District Judge Richard Sullivan, who sentenced Nicholson, went unreturned. Since July, six payments of Westgate investors' money — totalling $19.6 million — have trickled into
Sullivan's court, where Nicholson was prosecuted, pleaded guilty and was sentenced. That money could be earning interest in investors' bank accounts, or paying for living expenses, retirement or college
savings.

In Prusmack's case, the roughly $2 million he expects to get back from his Westgate losses could fund operations of two of his health and wellness, and sports and entertainment, businesses. "Rather than go borrow money, I'd rather use this," he said. Prusmack isn't facing the financial hardship experienced by other Westgate investors who have been struggling to make ends meet. "I just feel sorry for the other people," he said.

Howard Hellman, a Rockland County businessman who invested in Westgate after meeting an employee of the fund at the Church of the Presentation in Upper Saddle River, would like the government to return
his money, too. "As one of the investors, it's almost like a double whammy," Hellman said. "I do understand there's a process, but it's frustrating that the process is taking as long as it's taking." Victims of other recent Ponzi schemes have also had lengthy waits to get back their money.

A bankruptcy trustee in Bernard Madoff's case just sent out the first checks with investors' recovered funds earlier this month. Madoff was sentenced to 150 years in prison in June 2009. Investors in Texas financier R. Allen Stanford's alleged Ponzi scheme have yet to receive any
distributions of recovered funds, according to a trustee in that case. Stanford was indicted in June 2009
and his case continues.

E-mail: tangel@northjersey.com

Records Show Meeks Sought Favours for Pal from "Ponzi" Tycoon

By ISABEL VINCENT and MELISSA KLEIN

The e-mail was flagged “Importance: High.” A top executive at the Stanford Financial Group wanted an answer.

“Have we an update on Antigua?” demanded Lionel C. Johnson, a senior VP.

“Greg Meeks and Ed Ahmad have both called again this afternoon inquiring about the status of Ahmad’s VIP-box invitations.”

The Feb. 19, 2008, e-mail, obtained by The Post, was addressed to Yolanda Suarez, chief counsel for the company run by now-disgraced billionaire banker Allen Stanford. It and other insistent messages during that period show Queens Rep. Gregory Meeks was determined to get his pal, Edul Ahmad, invited to a Caribbean cricket match so he could meet another Meeks buddy, Stanford.

The urgent pleas were made a year after Ahmad handed Meeks $40,000.

Stanford would also throw cash at the congressman a few months later -- hosting a lavish fund-raiser in St. Croix in July 2008, complete with Cristal champagne and caviar, that raised at least $13,800 for Meeks’ campaign committee.

Now the circle of friends threatens to become a circle of felons.

Stanford, 61, is awaiting trial on charges he engineered a $7 billion Ponzi scheme. Ahmad, 43, was indicted this summer in New York, accused of falsifying $50 million in loan applications. And Meeks, 57, is under investigation by the House Committee on Standards of Official Conduct for the $40,000 Ahmad payment and is at the center of a separate federal probe for his role in a Queens nonprofit that allegedly stiffed Hurricane Katrina victims.

Meeks, an eight-term congressman, has a penchant for hobnobbing with shady characters and had few qualms about accepting their cash -- or doing them favors.

Stanford, a flamboyant businessman from Texas who once ran a bodybuilding gym in Waco, took over the family financial business. He also started his own bank in 1985 on the island of Montserrat and later moved his operations to Antigua. Forbes ranked him as the 205th-richest American in 2008, with an estimated worth of $2.2 billion.

Meeks’ relationship with Stanford dates back to at least 2003, when the congressman and his wife traveled to Antigua and Barbados on a junket sponsored by the Inter-American Economic Council, a Washington, DC, nonprofit backed by Stanford. It would be the first of many trips to sunny climes that Meeks and his wife, Simone-Marie, would take on the nonprofit’s dime.

Meeks sits on both the House’s Financial Services and Foreign Affairs committees and belonged to the Caribbean Caucus, an informal group of lawmakers Stanford sought to woo.

The economic development of the Caribbean, and the US Virgin Islands in particular, has been Congressman Meeks’ focus for over a decade,” Johnson, an executive in charge of government affairs at Stanford Group, wrote in an e-mail exhorting company employees to attend the July 2008 fund-raiser. Ticket prices began at $1,000 for the soirée at Stanford’s hilltop compound in St. Croix.

Eighty guests dined on lobster, caviar and foie gras and sipped Cristal and Mondavi Opus 1, a Napa Valley red that retails for $200 a bottle. An organizer of the party said the cost of the catering alone topped $25,000.

But, records show, the Meeks campaign reimbursed Stanford for only $3,591.

Stanford company employees donated $7,200, and Stanford himself gave $4,600. The company’s PAC kicked in another $2,000. The total take for the fund-raiser appears to be $34,000, according to campaign finance records.

The Texas receiver for the victims of Stanford’s alleged Ponzi scheme is seeking to claw back the $6,600 donated by Stanford and the company’s PAC, along with money Stanford gave to other pols, including Harlem Rep. Charles Rangel.

“Representative Meeks has not returned any of the money requested. The receiver asked Representative Meeks to join the dozens of other politicians and political committees who have returned their Stanford-related contributions,” said Kevin Sadler, the attorney for the receiver.

Sadler said he is in talks with Rangel’s lawyer to return the money, which included $8,300 to the Rangel campaign and $2,500 to his National Leadership PAC. Both Meeks and Rangel have said in the past that they gave the donations to charity.

In 2006, Stanford called in a chit for his generosity, asking Meeks to use his influence with Venezuelan President Hugo Chavez. The billionaire wanted Meeks to tell Chavez to begin a criminal investigation into a whistleblower at Stanford’s Venezuelan bank.

Meeks allegedly was heard on a speakerphone telling Stanford he would intervene with Chavez, according to the Miami Herald.

Meeks was soon in Venezuela visiting Chavez, ostensibly to thank him for providing cheap home heating oil to Americans. A year later, the whistleblower was arrested.

While Meeks was meeting with Chavez, there were already grave concerns among US government officials about Stanford’s reputation. The US ambassador to Barbados attended a “Legends of Cricket” breakfast along with Stanford in Bridgetown and tried to avoid being photographed in public with him.

“His companies are rumored to engage in bribery, money-laundering and political manipulation,” read a May 2006 diplomatic cable about the breakfast meeting, released last month by WikiLeaks.

When Stanford was knighted in Antigua in 2006, the title was so controversial that the country’s prime minister called the honor “most unfortunate.”

Stanford was indicted in June 2009 on charges of perpetrating a $7 billion fraud by selling certificates of deposit that promised inflated rates of return. He is currently being held at a medical center in the feds’ Butner, NC, prison, the same lockup holding Ponzi king Bernie Madoff. Stanford was declared incompetent to stand trial in January because of an addiction to prescription medication, but he is expected to be re-evaluated.

Meeks refused to answer any questions about his relationship with Stanford, or why he agreed to introduce Ahmad to the billionaire.

Both men have an interest in cricket. Stanford owned a cricket team and stadium, and Ahmad sponsored his own cricket competition in New York.

Meeks and Ahmad are longtime friends. The congressman held after-hours meetings with the real-estate broker at his Queens district office, and Ahmad boasted that he had his own personal political representation.

Meeks claims the $40,000 he pocketed from Ahmad was a loan, but a House ethics panel said it appeared to be a gift. Meeks paid back the money in 2010, but only after federal investigators questioned Ahmad about it.

Like Stanford, Ahmad’s businesses were long dogged by allegations of scandal, including predatory lending and forged documentation. State authorities launched five probes into his real-estate operations between 2006 and 2008.

Ahmad, who is currently out on $2.5 million bail and prohibited from traveling to his native Guyana, faces up to 30 years in prison. The government has said that additional charges or more defendants are likely in his case.

Kings of Queens

Allen Stanford

Texas billionaire in jail awaiting trial on charges he ran an $7 billion Ponzi scheme. Accused of selling certificates of deposit promising improbably high interest rates. Big-time political donor, whose nonprofit Inter-American Economic Council hosted Caribbean junkets for members of Congress, including Meeks. Held a 2008 St. Croix fund-raiser for Meeks.

Congressman Gregory Meeks

An eight-term Democratic congressman representing Queens, Meeks is the subject of a House ethics probe for accepting a $40,000 payment from Queens businessman Edul Ahmad in 2007. Also under federal investigation for his role in a Queens charity. Arranged for Ahmad to meet banker Allen Stanford, for whom Meeks did favors, including personally lobbying Venezuelan President Hugo Chavez.

Edul Ahmad

Queens real-estate broker and catering hall owner indicted on charges of mortgage fraud. Accused of falsifying $50 million in loan applications. Currently out on $2.5 million bail. Denied permission by the feds to travel to his native Guyana. Longtime friend of Meeks. Sought introduction Stanford through Meeks.

Swiss Bank Under Investigation‏

By MICHAEL ROTHFELD

The Justice Department is investigating whether French bank Société Générale SA helped facilitate Texas financier R. Allen Stanford's alleged $7 billion Ponzi scheme by ignoring suspicious transactions, people familiar with the matter said.

At issue is a Swiss bank account held by one of Mr. Stanford's companies at SG Private Banking (Suisse) SA, a Société Générale subsidiary, that was allegedly funded with investors' money and used to make payments into Mr. Stanford's personal accounts and for bribes to his Antiguan auditor. Prosecutors in the criminal probe are examining whether Société Générale failed to follow due diligence procedures or to ask questions about irregular banking activity, the people familiar with the matter said.

Mr. Stanford, 61 years old, was accused by federal prosecutors and the Securities and Exchange Commission in 2009 of fabricating high returns to lure investors around the world to buy about $7 billion worth of certificates of deposit from Stanford International Bank Ltd. in Antigua, the island where he was knighted.

"Sir Allen," as he was sometimes known, spent millions to travel by private jet, sponsor cricket matches, and buy real estate in the Caribbean and elsewhere. He has pleaded not guilty to charges of fraud, conspiracy and obstruction in Texas.

In a court filing in Mr. Stanford's criminal case last year, federal prosecutors wrote that he "secretly funnelled more than $100 million of investors' money through his numbered Société Générale account in Switzerland to his personal bank accounts for the payment of bribes and lavish personal expenditures."

That the bank is a focus of prosecutors' interest hasn't previously been disclosed.

SG Private Banking (Suisse) "has received requests for documents and other information" related to Mr. Stanford from the Justice Department, a Société Générale spokesman said in a statement. He said the bank is cooperating but will not comment further because it is an on-going investigation.

R. Allen Stanford at the federal courthouse in Houston in April 2010.

If the Justice Department concludes that the bank turned a blind eye to potential criminal activity, that could be a basis for a prosecution under the federal anti-money laundering statute, the Bank Secrecy Act, or other conspiracy or fraud charges, lawyers not involved in the case said. A Justice Department spokeswoman declined to comment. However, defense lawyers say it would be highly unusual to criminally prosecute a bank for facilitating a fraud based on the failures of its employees to uncover it. "At that level, prosecutions are reserved for the bad actor, unless you are prepared to say that the bank has a systemic problem and is corrupt at its core," said Robert W. Ray, a white collar defense lawyer at Pryor Cashman LLP.

People familiar with the matter said the focus for prosecutors is trying Mr. Stanford and any action against the bank is likely to wait until after the proceedings involving Mr. Stanford are finished. His case has been on hold as aA judge is expected to determine in the coming months whether he is competent to stand trial.

The probe shows that after more than two years investigators are still trying to unravel the global fraud allegedly carried out by Mr. Stanford and his associates. Mr. Stanford's companies utilized accounts at several Swiss banks, according to court documents and people familiar with the matter.

The investor money that prosecutors allege was siphoned off by Mr. Stanford for bribes and other purposes through Société Générale related to an SG Private Banking account numbered 108731 in the name of Stanford Financial Group, a parent entity for the many Stanford companies. The Swiss account was allegedly funded with investor money transferred from Stanford International Bank accounts, according to the people familiar with the situation and records filed in court.

Prosecutors have said that 108731 was a "secret account" because it wasn't included in the Stanford corporate accounting system, and because only Mr. Stanford and his chief financial officer, James Davis, had access to it. The account was overseen by Blaise Friedli, an SG Private Banking executive vice president in Lausanne, Switzerland, who Mr. Stanford named to his company's "international advisory board," according to a corporate newsletter filed in court.

A former lawyer for Mr. Stanford, Dick DeGuerin, said at a 2009 hearing that 108731 was "not a secret bank account," and that records would show funds didn't go to Mr. Stanford, "but were used within the Stanford companies." Mr. Davis has pleaded guilty to criminal charges and is cooperating with authorities. Mr. Friedli didn't respond to requests for comment.

Some of the investor money in the 108731 account was used for allegedly illegal transactions, prosecutors have said in filings and in court. Mr. Stanford also used investor funds in the 108731 account as collateral for a $95 million loan Société Générale gave him around 2004, according to people familiar with the situation. Money from the loan was allegedly spent on bribes and transferred into Mr. Stanford's personal accounts, the people familiar with the matter said.

In December 2008, as his alleged scheme began to fall apart amid investor redemptions, Mr. Stanford's company authorized the bank to take the funds that were used as collateral out of the 108731 account to repay the loan, the people said.

Prosecutors are investigating whether Société Générale did proper due diligence on the loan to Mr. Stanford and how it was spent, and why the bank didn't identify or report that investor money was being used for suspicious transactions, the people said.

A lawyer for Mr. Stanford, Ali Fazel, declined to discuss the case or the Société Générale accounts, citing a gag order. "We disagree with the government's theory of the case and we are looking forward to the trial to be able to show that," Mr. Fazel said.

Mr. Davis regularly corresponded with Mr. Friedli, making written requests for wire transfers of millions of dollars to Mr. Stanford's personal accounts, and payments of up to $125,000 to the Antiguan auditor's accounts in London and the British Virgin Islands, court filings show. Prosecutors have said in court filings that the payments to the auditor were bribes.

A phone number for the auditor, CAS Hewlett & Co., has been disconnected. The owner of the company, Charles Hewlett, died in 2009.

Weston Calls for FSRC

This is an interesting article from the Caribarena. Note the highlighted sections where the minister is asking about the report into the FSRC!

Antigua St John's - Opposition Senator Lennox Weston spoke at length on Monday against the need for additional board members to be added to the Financial Regulatory Services Commission (FSRC), and called for the release of the controversial report into the Commission ordered following the R Allen Stanford debacle.

Weston told the Upper House, "The government is our government. It is our money that the government is spending, and the prime minister gave an undertaking to Parliament and to the nation that he would review the sector, and he would table the results, and let the chips fall where they may."

He said it now seemed that the UPP administration intends to keep the contents of the review away from the public.

"Now it seems as if, what is before us is indicating that the government intends to keep its review a secret. Whatever the review says... that we hear that is very bad, it intends to keep it a secret from the people of Antigua & Barbuda, although we are faced with all these pending charges, and all kinds of lawsuits against us ..."


Weston noted, however, that with Stanford investors intent on suing Antigua & Barbuda for its perceived role in the financier's workings, the government was leaving the door open for these investors to reveal information "piece by piece" in the American press, with Antigua & Barbuda lacking the means to defend its reputation.

"The Americans always say, get ahead of the news," Weston noted. "Get it out early, and move on. ... This is not a time when we can hide information. ... We can't control information by tabooing it. And this has been going on for way too long."

Weston, along with other opposition senators, cried down the government's proposal to increase the FSRC board from four members to seven, saying the bill did not adequately explain the need for this.

Subsequent government senators, including Joanne Massiah and Dr Edmond Mansoor, posited that this was a necessary move to allow the FSRC to handle its additional responsibility to regulate non-banking financial institutions including the credit unions.