Justices Throw a Rope to Stanford Ponzi Victims

WASHINGTON (CN) - Federal law does not preclude investors allegedly defrauded by R. Allen Stanford's $7 billion Ponzi scheme from attempting recovery via state class actions, the Supreme Court ruled Wednesday.

 For nearly 15 years, Stanford Group Co. and related entities sold certificates of deposit issued by its Antigua-based Stanford International Bank, and then used investor funds to cover its liabilities.

 Its eponymous leader was sentenced in 2012 to 110 years in federal prison after a federal jury in Houston, Texas, convicted him on 13 of 14 counts of conspiracy, wire fraud and mail fraud.

Read the full transcript from the Courthouse News Service here. 

 For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/

SLUSA - The full Court Ruling

Great news for ALL victims! With the SLUSA ruling going in favour of the victims all the FROZEN court cases can now proceed.

To view the full court ruling on SLUSA click Here

For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/

U.S. Justices say Allen Stanford Victim Lawsuits can go Forward

(Reuters) - The Supreme Court on Wednesday ruled that lawyers, insurance brokers and others who worked with convicted swindler Allen Stanford cannot avoid lawsuits by investors seeking to recoup losses incurred in his $7 billion Ponzi scheme.

On a 7-2 vote the court held that lawsuits filed in state court can go forward. New York-based law firms Chadbourne & Parke and Proskauer Rose and insurance brokerage Willis Group Holdings Plc were all sued by former Stanford investors. The investors also sued financial services firm SEI Investments and insurance company Bowen, Miclette & Britt.

Writing for the majority, Justice Stephen Breyer said the Securities Litigation Uniform Standards Act did not prevent the state lawsuits from proceeding. The law says that state lawsuits are barred when the alleged misrepresentations are "in connection with" the purchase or sale of a covered security.

As the defendants in the case were not selling securities traded on U.S. exchanges, "it is difficult to see why the federal securities laws would be - or should be - concerned with shielding such entities from lawsuits," he wrote.

The defendants sought Supreme Court review after the New Orleans-based 5th U.S. Circuit Court of Appeals in March 2012 said the lawsuits brought under state laws by the former Stanford clients could go ahead.

The former Stanford clients are keen to pursue state law claims because the Supreme Court has previously held that similar so-called "aiding and abetting" claims cannot be made under federal law.
The class action lawsuits filed by the former investors accused Thomas Sjoblom, a lawyer who worked at both law firms, of obstructing a Securities and Exchange Commission probe into Stanford, and sought to hold the other defendants responsible as well.

The Obama administration, representing the SEC, sided with the defendants over the interpretation of the state law in an avowed effort to protect the agency's own authority to pursue wide-ranging investigations.

The administration pointed out that the "in connection with" language in SLUSA that limits state court lawsuits mirrors language in federal law that gives broad authority of the SEC to pursue such misrepresentations. Therefore, the administration urged the court to give the phrase a broad interpretation.

Stanford's fraud involved the sale of certificates of deposit by his Antigua-based Stanford International Bank. Much of the litigation centers on whether these qualified as securities under applicable laws.

The cases are Chadbourne & Parke LLP v. Troice et al, U.S. Supreme Court. No. 12-79; Willis of Colorado Inc et al v. Troice et al, U.S. Supreme Court, No. 12-86; and Proskauer Rose LLP v. Troice et al, U.S. Supreme Court, No. 12-88.

To join the debate click here. 

For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/

Stanford Lodges another appeal March 12th 2013

Allen Stanford lodged a second appeal on March 12th 2013, this is particularly relevant to victims since approximately $300 million he was ordered to forfeit as a result of his conviction cannot be released until the appeals process is complete.

 Allen Stanford intends to represent himself in the appeal, below is the hand written letter Stanford sent to the 5th circuit court of appeals, it makes interesting reading and shows Stanford's state of mind.

Stanford Appeals Letter Mar12 2013 by Stanfords Forgotten Victims

To join the debate click here.


For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/

Stanford Lodges Appeal March 4th 2013

Allen Stanford lodged an appeal on March 4th 2013, this is particularly relevant to victims since approximately $300 million he was ordered to forfeit as a result of his conviction cannot be released until the appeals process is complete.

 Allen Stanford intends to represent himself in the appeal, below is the hand written letter Stanford sent to the 5th circuit court of appeals, it makes interesting reading and shows Stanford's state of mind.

Stanford Appeal Mar 4 2013 by Stanfords Forgotten Victims

To join the debate click here.


For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/

SEC wins dismissal of lawsuit over handling of $7 billion Stanford fraud

We are awaiting a statement from Gaytri regarding this, she says the Judge totally missed the point of our lawsuits and she is appealing this. We will post Gaytri's response as soon as we receive it.


 (Reuters) - A federal judge in Florida has thrown out a lawsuit accusing the U.S. Securities and Exchange Commission of negligence for failing to report that the now-imprisoned swindler Allen Stanford was running a $7.2 billion Ponzi scheme.


 U.S. District Judge Robert Scola in Miami said the market regulator was shielded under an exception to the Federal Tort Claims Act that bars claims arising from misrepresentation or deceit.


 The plaintiffs, Carlos Zelaya and George Glantz, said they lost a combined $1.65 million with Stanford, and sought class-action status on behalf of investors who were victims of his fraud. They plan to appeal Monday's decision, their lawyer Gaytri Kachroo said. SEC spokesman Kevin Callahan declined to comment.


 Stanford, 63, is serving a 110-year prison sentence after he was convicted on criminal charges in March 2012 for a fraud that the government said was centered in certificates of deposit issued by his Antigua-based Stanford International Bank.


 Zelaya and Glantz claimed that the SEC considered Stanford's business a fraud after each of four examinations between 1997 and 2004, but failed to advise the Securities Investor Protection Corp, which compensates victims of failed brokerages.


 The SEC filed civil charges against Stanford in February 2009, two months after the multibillion-dollar Ponzi scheme of New York-based swindler Bernard Madoff was uncovered. In a typical Ponzi scheme, investors are promised high or consistent returns relative to the amount of risk taken, and older investors are paid with money from newer investors.


 Last September, Scola let the lawsuit against the SEC go forward, saying the plaintiffs could argue that the regulator had breached a duty to report Stanford's misconduct.


 But on Monday, he said the FTCA exception barring claims of misrepresentation deprived him of jurisdiction.

 "The plaintiffs claim that they were induced into entering disadvantageous business transactions because of the SEC's misrepresentation," he wrote. "The plaintiffs' cause of action is a classic claim for misrepresentation."


 Their lawyer Kachroo said: "We believe that the judge did not draw the appropriate distinction between a claim based on a misrepresentation and our claim based on a failure to warn in line with the SEC's mandatory duty to notify SIPC."


 In 2010, the SEC's inspector general criticized the regulator, finding that it knew as early as 1997 that Stanford was likely running a Ponzi scheme.


 Earlier this year, federal appeals courts in New York and California dismissed lawsuits against the SEC by victims of Madoff's fraud.


 The case is Zelaya et al. v. U.S., U.S. District Court, Southern District of Florida, No. 11-62644.


Read More: http://sivg.org.ag/topic177.html


For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group - SIVG official forum http://sivg.org.ag/

SEC Absorbs Body Blows But Remains Undefeated in Lawsuits Against It

The SEC has been named as a defendant in a series of unusual lawsuits recently. One of the cases, a lawsuit brought by alleged Ponzi schemer Allen Stanford, was voluntarily dropped last month and now a second case filed by Madoff victims has been dismissed by a federal court.

In 2009, two Madoff investors sued the SEC under the Federal Tort Claims Act alleging that they were damaged by the agency's gross negligence in its oversight, investigations, and examinations of Bernard Madoff and his firm. On Tuesday of this week, Judge Laura Taylor Swain dismissed the case for lack of subject matter jurisdiction. In short, the court ruled that the decisions of the SEC regarding whom to investigate and how to conduct such investigations were discretionary and shielded from suit by sovereign immunity.

The SEC did not escape harsh criticism from the court, however. The court noted that the plaintiffs' allegations described conduct that "defied common sense and reeked of incompetency." It stated that:

“Scandalous and outrageous as Plaintiffs' allegations (and findings of the OIG Report on which they are based) are, Plaintiffs fail to identify any specific, mandatory duty that the SEC violated in its numerous instances of sloppy, uninformed, irresponsible behavior....That the conduct in question defied common sense and reeked of incompetency does not indicate that any formal, specific, mandatory policy was "likely" violated.

Allen Stanford's Lawyers Say Alleged Ponzi Schemer Needs Luxury Rehab

Lawyers for Allen Stanford say the billionaire allegedly Ponzi schemer is addicted to an anti-anxiety medication and needs to be released from prison and sent to an upscale rehabilitation facility in Houston, Texas.

Stanford, a psychiatrist working for his legal team said in court filings, has a traumatic brain injury; is overmedicated on and addicted to Klonopin; has dementia caused by an assault that caused traumatic brain injury; and has major depressive disorder.

The psychiatrist wants him to stay at the Memorial Hermann Hospital Prevention and Recovery Center. A website for that center notes that the center is "equipped with a greenhouse and basketball pavilion" and a virtual tour shows patients playing billiards in a recreation room.

In a Jan. 11 filing, a lawyer for Stanford said that the defense agrees that the accused needs to be inpatient for the first 30 days, but then may complete treatment on an outpatient basis.

"Such placement will comply with the mandates of due process, provide the appropriate medical treatment necessary for rehabilitation, and allow access to his attorneys and family members," Ali R. Fazel argued. "As discussed in cases cited above placement in a Federal Medical Center, prison, will undermine the rehabilitative process and lengthen the recovery period."




The lawyer argued that the federal prison never should have given Stanford the medication he's become addicted to and that it was not a suitable facility for Stanford's recovery.

"The Federal Detention Center should never have prescribed Klonopin to Mr. Stanford, as he does not suffer from an anxiety or panic disorder, nor does he suffer from epileptic seizures," Fazel argued.

"Prescription of this medication created medical and mental problems that Mr. Stanford did not have prior to being incarcerated," Fazel said. "The side effects of Klonopin are well known and available to anyone with internet capability."

Earlier this month, a federal judge indefinitely delayed Stanford's trial, which had been set to begin on Jan. 24.

Now Stanford's lawyers and the federal prosecutors working on the case are awaiting a judge's decision on whether he should be allowed to recover from his additions so he is fully capable of defending himself in court.

Three psychiatrists, including one hired by the government, said that Stanford "suffers from a mental disease or defect that presently deprives him of the ability to effectively assist his attorneys in preparing for trial, or to testify on his own behalf at trial," Fazel said.

Justice Department lawyers had earlier argued that Stanford's lawyers were simply trying to get a "lengthy continuance to further what appears to be his only goal in this case: obtaining pretrial release."

TIME RUNNING OUT FOR INTERNATIONAL INVESTORS TO REGISTER THEIR CLAIM WITH THE SEC

Time is running out for Stanford investors.

Those who have not already filed a claim must consult their attorney without delay or the attorney hired by the Stanford International Investors. Dr Gaytri Kachroo of Kachroo Legal Services is experienced in submitting FTCA claims, having already done so for many Madoff investors. Contact: info@kachroolegal.com

From their experience of dealing with the Madoff investors claims, KLS have asked that Stanford International investors must make contact by JANUARY 15th to be certain there is sufficient time to process and submit their claims.

Stanford investors must file administrative claims under the Federal Tort Claims Act against the Securities and Exchange Commission before the deadline of 16th February 2011, after which claims are barred forever under the statute of limitations.

If you leave it until later, you run the risk of being too late.

STANFORD INVESTORS FACE DILEMMA

Investors in the failed Stanford International Bank, a part of the Stanford Financial Group, in receivership since the arrest of Allen Stanford, who is currently in detention in Houston awaiting trial on fraud charges, face a dilemma.

The various investor groups appear to have been split, deciding whether to pin their hopes of recovery on the political efforts of the Stanford Victims Coalition, who have been lobbying for SIPC coverage, eligible only to investors of the registered broker-dealer, Stanford Group Company, comprising mostly domestic US investors. After almost two years, there are still few signs of any successful resolution.

The other groups, headed by the Stanford International investors, have engaged an attorney to submit administrative claims under the Federal Tort Claims Act against the SEC, for their negligence in failing to act against Stanford sooner, despite knowing for 13 years, it was likely a Ponzi scheme. They claim the action against the SEC will not prejudice any SIPC recovery efforts, and is open to all the Stanford investors, irrespective of nationality.

The deadline for claims is fast approaching. Unless claims are submitted correctly and timely before the two year Statute of Limitations expires next month on the 16th February 2011, Stanford investors will be denied any recovery from the US government, forever.

Any Stanford investors who have not yet decided which is best for them, should contact their attorney at their earliest opportunity, or the attorney submitting the FTCA claims on behalf the Stanford International investors: Kachroo Legal Services of Cambridge, Mass: info@kachroolegal.com who are already experienced in submitted claims on behalf of the Madoff investors.

How R. Allen Stanford Bribed Congress

Source:The Judiciary Report


An insightful article in the Miami New Times explored the bribery aspect of the R. Allen Stanford case. It also serves to confirm what I have stated all along, bribery is a way of life for many in the corporate world. I saw that firsthand in the Madonna case, which coincidentally happened in Miami as well, much like many elements of the Stanford case.


The R. Allen Stanford ponzi case reveals how astonishingly easy it is to bribe Congress. The FBI and SEC knew of Stanford's misconduct since the 90's and did nothing. Why? Stanford gave $5,000,000 to various Republicans and Democrats in Congress to kill a bill introduced by former president Bill Clinton A/K/A "Bubba" that would have shut fraudsters like him down. The bill was called the Financial Services Antifraud Network Act.



After the donations to Congress people, said bill addressing bank fraud was mysteriously killed in the Senate. Had it passed, Stanford's goose most likely would have been cooked.

Another thing that disgusts me about the Stanford case, is how he corrupted the judicial and arbitrary system, using his looted ponzi money, to buy influence with judges, in terrible bids at silencing employees that began blowing the whistle several years ago.


Charles Hazlett, former Stanford employee that was defrauded in court, should sue him again

Said American employees that left in separate cases several years ago or were terminated when they figured out he was running a ponzi scheme, legally tried to receive their pay and all that was owed to them, but due to corruption by Stanford, were slapped with $150,000 to $200,000 in legal fees for daring to file a claim and speak out about his wrongdoing.

Said judges and arbitrators should be brought up on fraud charges, as these people made serious, credible allegations that were 100% true and had you heeded the warnings, instead of fawningly bowing to corruption, investors all over the world wouldn't be out $8 billion dollars and America's name in the financial world would not have sustained another terrible blackeye.



Madoff, Stanford and other greedy, corrupt titans in the corporate sector, killed the American dream for many. They also killed free trade, with this crooked redistribution of wealth.

These men and women are not successes. They are thieves, frauds, crooks and liars, who should have gotten real jobs instead of stealing from everyone else who actually has one.

Success in the corporate arena is when you build a company from the ground up that provides a true service - such as American Airlines (air travel), Apple (computers), Macy's (clothes and housewares) and Marie Callender's (food) to name a few.

Stealing everyone's money under false pretenses, so you can live a lavish lifestyle makes you a failure and a fraud.

The Fall of a Titan

Even more than Bernie Madoff's tale, Allen Stanford's rise and fall is the story of the past decade in America, where greed mixed with cynical politics birthed a perfect storm for accused hucksters such as Stanford to bring the global economy to its knees. And as Stanford's story shows, the warning signs were there. They were simply ignored...

In 1999, a DEA investigation found that members of the vicious Juárez Cartel in Mexico had deposited more than $3 million in Stanford's bank to launder drug money. Stanford quickly surrendered the cartel's money to the DEA and earned praise from the agency for his quick action. But later that year, federal regulators placed Antigua on a blacklist of nations suspected of money laundering and fraud.

That same year, the Clinton administration introduced a bill to crack down on overseas banks favored by gambling rings, drug militias, and terrorists. Two months later, according to a study by consumer advocacy group Public Citizen, Stanford hired a powerhouse lobbying group to fight the bill and began donating to both major parties. He handed out $208,000 to Republican campaign committees and $145,000 to Democrats that year. Among his biggest recipients were powerful Texas lawmakers, including House Democratic Caucus Chair Martin Frost. The bill, despite passing a House committee 31-1 with strong Treasury Department backing, was allowed to die in a Senate committee.

In 2002, as Congress took up a bill called the Financial Services Antifraud Network Act, which would have strengthened U.S. regulators, Stanford upped his lobbying. That year, according to the Center for Responsive Politics — a nonprofit group that monitors campaign money — Stanford's company gave $800,000 to the Democratic Senatorial Campaign Committee — the vice chairman of which was Florida's own Sen. Bill Nelson. The senator received more of Stanford's cash than any other member of Congress, according to one study, with $45,900 donated to his campaign. Stanford, in fact, personally hosted a fundraising event for Nelson in Florida. The anti-money-laundering bill died in a Senate committee ...

In all, Stanford spent nearly $5 million lobbying Congress between 1999 and 2008 and dished out $2.4 million to federal candidates. He also sponsored dozens of free, "fact-finding" trips to Antigua and other Caribbean islands for politicians and their staffs on his fleet of jets. Records of the trips show that former Florida Rep. Katherine Harris took one such jaunt to Saint John's. Disgraced Texas Republican Tom DeLay flew 11 times on Stanford's jets, according to the Dallas Morning News...

Like Hazlett's, Basagoitia's claims were summarily dismissed, and both brokers were left to pay hundreds of thousands of dollars in back pay and attorney's fees to Stanford. Neither ever heard from the SEC regarding their accusations. And if their voices weren't loud enough for regulators, another Miami employee took his suspicions to court in 2006 and laid out in even greater detail Sir Allen's schemes....

In the filings, De Maria said he told his immediate boss in 2004 he suspected the firm was laundering South American drug money, lying to investors, running a gigantic Ponzi scheme, and paying off Antiguan and American politicians to look the other way. The company settled De Maria's case almost immediately after his lawyers got a court order that would have forced Allen Stanford to testify...

The regulatory board that heard Hazlett's and Basagoitia's testimony is sanctioned directly by the SEC, and De Maria publicly made his claims in Miami-Dade Circuit Court. Yet the wing of the government charged with rooting out bank and investment fraud did not respond to the concerns piling up around Sir Allen's operations..

More Charges Coming Against Allen Stanford Executives

HOUSTON, Texas, Fri. Sept. 24, 2010: Several former executives of the company founded by 60-year-old R. Allen Stanford could soon be in hot water with the Securities and Exchange Commission.

The SEC has reportedly notified several that fraud charges will be filed against them, Rose Romero, director of the Securities and Exchange Commission`s Fort Worth office, said.

The disclosure came during her appearance this week before the Senate Banking committee. Romero, however, did not say who would be targeted by the charges, or when they would be officially filed.

Accountants Mark Kuhrt and Gilberto Lopez, and Leroy King, head of the financial services regulatory commission in Antigua - where Stanford`s bank was based and where he was also a naturalized citizen –may be the individuals who will face charges related to the fraud.

Romero`s comments came as angry senators grilled her and top officials of the SEC on Wednesday, citing the agency`s delays in taking action against accused swindler Stanford despite repeated red flags about his financial firm`s operations.
Committee chairman Chris Dodd, D-Conn., described the situation as one in which `you had an examination office yelling `fire, fire, fire` and an enforcement branch yelling `no fire.`

Sen. Kay Bailey Hutchison, R-Texas, called the revelations `stunning` and said that she hoped something is being done to make sure such a lapse doesn`t happen again.
An inspector general`s report concluded that Fort Worth SEC officials harbored suspicions that Stanford was acting illegally as early as 1997, two years after his company`s broker-dealer arm, Stanford Group Co., registered with the SEC but did nothing.

The new charges disclosed by Romero would add to those filed against the company`s head honcho, the Texas-born, Antigua-based Stanford, his chief investment officer Laura Pendergest-Holt and James Davis, the former chief financial officer of Houston-based Stanford Financial Group. Davis pleaded guilty last month to charges including fraud while Pendergest-Holt has pleaded not guilty to allegations of fraud and conspiracy to commit money-laundering.

Stanford, the former flamboyant billionaire and cricket mogul has pleaded not guilty to 21 counts of fraud, money laundering and obstruction. He faces up to 375 years in jail if convicted. A trial date has not yet been set for him.

The scheme involved the sale of Certificates of Deposit (CDs) offering unheard-of returns.

Related News:Law .Lloyd's of London, Allen Stanford Civil Trial Begins on Insurance Claim

Lloyd’s of London underwriters are attempting to convince a U.S. judge that financier R. Allen Stanford conspired to steal money so they can avoid paying attorneys to defend him on criminal fraud charges.

U.S. District Judge Nancy Atlas today began hearing evidence in Houston federal court in a three-day civil trial conducted without a jury in Stanford’s lawsuit against the London-based insurers.

Stanford, charged with leading a $7 billion fraud scheme, and three former colleagues who are now co-defendants in his criminal case, claim they can’t afford defense lawyers without access to $100 million in liability insurance Lloyd’s sold to Stanford Financial Group. Lloyd’s has denied their claim, citing a guilty plea by Stanford’s former finance chief and reports by forensic accountants who’ve probed Stanford’s books.

“Basically, the underwriters sought to convict their own insureds,” Lee Shidlofsky, a lawyer for Stanford’s colleagues, said in an e-mail earlier this year. “And by doing so, underwriters undermined the very essence of the protections afforded by a directors’ and officers’ policy.”

Stanford and his co-defendants are charged with 21 criminal counts of deceiving investors about the security and oversight of $7 billion of certificates of deposit issued by Antigua-based Stanford International Bank Ltd.

Criminal Trial

In January, Stanford will be tried before a federal court jury in Houston. The other defendants will be tried together at a later time.

During the proceedings today, Dan Cogdell, a lawyer for co-defendant Laura Pendergest-Holt, said his client has reached a settlement with Lloyd’s. Pendergest-Holt was Stanford’s chief investment officer.

Outside the courtroom, Cogdell declined to disclose the terms of the accord.

In December 2008, Stanford International Bank’s financial statements showed the bank had $8.1 billion in total assets, Lloyd’s lawyer Barry Chasnoff told Atlas today. When the SEC seized the operation a few weeks later, the money was largely missing.

“In spite of herculean efforts, the receiver has recovered less than $1 billion of those assets,” Chasnoff said. “This case is the story of what happened to those billions.”

Broader Definition

Lloyd’s lawyers claim that what transpired fits the underwriters’ description of money laundering, defined in the policies as any attempt or conspiracy to misappropriate someone else’s money, a definition which is broader than that of the corresponding federal criminal statute.

“The facts fit money laundering whether he used that term or not,” Chasnoff said in court last year, referring to the plea agreement of ex-Stanford Chief Financial Officer James M. Davis.

Chasnoff said Lloyd’s policies are written so that any allegation of money laundering is enough to deny coverage of defense costs.

While prosecutors have not charged Stanford or the other defendants with money laundering, the underwriters claim Stanford and the other executives violated their version of it, voiding coverage.

Atlas asked the Lloyd’s lawyer where the unusual definition of money laundering had come from.

Destitute

Chasnoff replied the clause had been in Stanford’s three previous directors’ and officers’ policies and was originally brought to the contract negotiation at Lloyd’s by Stanford’s insurance broker.

“All I can say is, it’s turning out not to be such a bargain,” Atlas remarked. She asked Lloyd’s to present a witness on the origin of the definition. Chasnoff said the underwriters hadn’t planned to offer one.

All the defendants had told Atlas they’re destitute. Their assets were seized in February 2009 after the U.S. Securities and Exchange Commission sued them for allegedly paying returns to early investors by taking funds from later investors.

When Lloyd’s denied their coverage in November, the former executives sued and won a temporary court order requiring the underwriters to pay for the defense lawyers until a judge can determine validity of the coverage.

Lloyd’s has already paid more than $15 million to attorneys representing the four criminal defendants and several lower- ranking employees also under investigation by prosecutors and securities regulators, according to court papers.

Standard of Proof

The civil proceeding in Atlas’s courtroom will provide a preview of evidence and testimony that prosecutors may seek to use in the criminal trials.

The biggest difference is Lloyd’s underwriters need only convince Atlas that Stanford is more likely guilty than not guilty, a lesser standard of proof than the beyond-a-reasonable- doubt certitude required of a criminal trial jury.

Neither Stanford nor his co-defendants are expected to testify, as anything they say can be used against them in the criminal case.

This trial pits Stanford’s stated need for the insurance proceeds against his right to avoid self-incrimination by testifying in the proceeding.

He can’t take the witness stand to obtain the former without risking the latter, lawyers for Stanford have said in court filings.

Defer Ruling

Atlas said today that she would defer a ruling on whether she’ll infer that the defendants are guilty if they assert their Fifth Amendment rights not to testify, as she is allowed to do under civil law.

“I’m just going to hold on that,” Atlas said. “I’d rather not get into it until I’ve heard the evidence.”

Lloyd’s is urging Atlas to make that inference, which she’d be forbidden to do in a criminal trial.

“This is not the criminal trial,” Atlas told lawyers today. She said the underwriters have established in court filings what Stanford and the other executives knew of the misconduct alleged by Lloyd’s and when they knew it.

“It is important,” Atlas said of her ruling in the case. “I recognize it is a decision you want promptly, with as much reasoning as possible. This is a matter than needs careful consideration.”

Stanford, who has been in jail without bond since he was indicted in June 2009, will attend each day’s court session in shackles. Atlas ruled he could have one hand free to ease handling of documents and communication with his lawyers.

The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09cv298, U.S. District Court, Northern District of Texas (Dallas).

(Sir) R Allen Stanford – The World’s Biggest Bank Robber

By Ian Moncrief-Scott

When Verity (not her real name) retired she had simple dreams of living in the sun, caring for animals and putting something back into society.

R Allen Stanford, with his many active and passive accomplices, true fellow criminals, calculatingly shattered those dreams.

Indeed, Stanford created Verity’s worst nightmare, which has left her destitute, entirely reliant on family support and needing scraps from kind neighbours to feed her dog.

Pretending his innocence, Stanford languishes in an American prison with room TV, entertainment and exercise, hiring and firing attorneys, with three square meals a day, heat and light paid by the taxpayer.

Meanwhile, Verity desperately worries from where the next meal will come.

So who allowed this tragedy unfold?

As long ago as 2007, Verity, simply asked her bank to transfer her personal funds. These were for her retirement.

This was not an investment in Stanford’s fraudulent Certificates of Deposit but a straightforward, routine, everyday bank to bank SWIFT transfer.

Verity’s bank was Barclays Wealth "the UK's leading wealth manager in terms of assets under management and the largest retail multi-manager.”

The pensioner had worked hard all her life and wanted her savings to be conveniently placed in Stanford International Bank in Antigua, the country she had chosen for her retirement.

She trusted and relied upon Barclays Wealth to safely transfer her entire life savings.

Verity gave her clear instructions in writing as provided by Stanford International Bank.

Substantial monies were to be transferred to HSBC, London, using the SWIFT system - code MIDLGB22XXX for further credit to SIB in Antigua (Sort Code 40-05-15) etc.

However, the Sort Code 40-05-15 is not Stanford International Bank’s but HSBC International Bank London.

HSBC acts as an official correspondent bank for SIB, which is now in receivership.

According to Vantis, the Receiver appointed by the Government of Antigua, her money is not at Stanford International Bank in Antigua at all. It has simply disappeared from the SIB account at HSBC in London.

HSBC contends, in its own remarkable blaze of self-publicity, “We aspire to be one of the world's great specialist banking groups, driven by commitment to our core philosophies and values."

Much has been made of Stanford’s Ponzi Scheme but there has been little focus on the missing bank deposits in Antigua.

Antigua does not have a banking deposit protection scheme so any funds held in or associated with the country, are potentially vulnerable.

Antigua is also irrefutably well-known as a most dubious and corrupt place.

In 2001, with the formation of First Caribbean International Bank, Barclays effectively withdrew its own brand from the region.

Antigua has been the subject of two countrywide Treasury Advisories connected to Stanford and a US Senate report highlighting concerns about its links to correspondent banking.

Described at the time by the U.S. Department of Justice as "the largest case of non-drug-related money laundering every brought to justice", the case was significant enough to warrant inclusion in a report dated February 5, 2001, produced by the Minority Staff of the Permanent Subcommittee on Investigations, entitled Correspondent Banking: A Gateway to Money Laundering.

So why did Verity wait until 2009 before alerting Barclays that the funds were missing.

The reason for this was because Verity was told by Stanford International Bank that for cost saving purposes it did not issue written account statements but that a Stanford Financial Adviser would telephone her monthly to confirm her standing.

Each month she was assured by SIB Financial Advisers that her account was in good order, which she properly took to mean, held the expected level of funds following the transfer from Barclays Wealth.

During this time Verity had dealings with Kathy Belaziar and Yecella Mondez, at SIB Antigua.

Thus, using this method, the huge banking fraud at Stanford International Bank, Antigua remained concealed from March 2007 to December 2008, until Verity attempted to withdraw her funds.

Who has allowed this to happen?

Unlike the financial regulators, Verity knew nothing of Stanford’s reckless and criminal Ponzi Scheme.

She just needed a safe and convenient bank to hold her retirement savings and trusted the high profile name of Stanford, much endorsed by celebrities, international politicians and world leaders.

Verity, like any of us, relied upon the financial regulators in the United States of America, UK and Antigua.

Meanwhile, Leroy King, the former head of the financial regulatory authority in Antigua, is the subject of a US extradition warrant. This is is not in Antigua’s or, more correctly, certain Antiguan politicians’ interest, that this should ever be fulfilled.

Karyl Van Tassel, FTI Consulting, a forensic accountancy acting for Ralph Janvey, the Receiver appointed by the Court to unravel Stanford’s crimes has proved that billions of dollars destined for his dubious bank in woefully-regulated Antigua, never arrived.

Instead, on Stanford’s instructions billions of dollars (sterling/euros) were transferred from HSBC International London to Stanford’s corporate accounts at Toronto Dominion Bank in Canada, Trustmark National Bank in Mississippi and, mainly, the Bank of Houston.

The position of the victims of Stanford’s crimes suing HSBC and the other banks involved in a class action is even clearer.

They claim that “Upon information and belief, prior to and during their establishment of a correspondent banking relationship with Stanford, HSBC gathered sufficient information concerning Stanford to understand Stanford’s business and, as a result, knew, or should have known, that Stanford was conducting an illegal and fraudulent scheme.

Stanford provided members of the Class (sic the Stanford crime victims) with deposit instructions indicating that they could make deposits in Antigua-based SIBL by wiring funds to HSBC in London. HSBC was aware of these instructions that were provided to members of the Class, and expressly agreed with Stanford to receive wire deposits from members of the Class for further transfer to SIBL in Antigua.

After the establishment of the HSBC-Stanford correspondent bank relationship, members of the Class transferred funds to HSBC with the intent that such funds would be transferred to SIBL in Antigua for deposit there. Upon information and belief, all or substantially all of the funds that members of the class transferred to HSBC, with the intent that such funds would be transferred to SIBL in Antigua for deposit there, were redirected by HSBC, in concert with and/or at the direction of Stanford, to bank accounts in Houston, Texas, and elsewhere, after which such funds were distributed to other Stanford entities, “invested” in Allen Stanford’s private ventures, used to fund Allen Stanford’s lavish lifestyle, and reinvested in the criminal venture to keep the fraudulent scheme in operation.

Based upon the foregoing, and based upon its longstanding correspondent banking relationship with Stanford, HSBC knew, or should have known, that Stanford was conducting an illegal and fraudulent scheme.”

However, this matter is far from just about Stanford.

The role of HSBC and the competence of the international payment agencies and regulators involved must now be questioned.

The question is a simple one:

How did a single shareholder institution with impossible multi-billion dollar yearly growth, with its base in ineptly regulated Antigua, having its accounts passed by a 73 year old from his a terraced house in Harrigey, satisfy the most basic due diligence tests expected by the Wolfsburg and Basel accords for correspondent banking relationships?

Meanwhile, as Verity and her dog go hungry, bankers, politicians, regulators and ombudsmen enjoy their inflation-proof pensions and well-compensated lifestyles.
Ends.

Allen Stanford loses bid to leave jail pretrial

Allen Stanford, accused of masterminding a $7 billion Ponzi scheme, has lost a bid to get out of jail to work on a separate trial seeking to hold Lloyd's of London responsible for his defense costs.

Stanford, who has been locked up for 14 months awaiting his criminal trial, sought to be freed into a U.S. marshal's custody so he could be transported to his lawyer's office to prepare for the Aug. 24 Lloyd's trial. [ID:nN15220064]

The disgraced Texas financier argued he needed to spend as much as 12 hours a day, seven days a week working with his lawyer.

He also sought to delay the Lloyd's trial to Oct. 25, complaining that his jail guards ruined most of his case files on Aug. 2. Stanford said they "maliciously dumped" his carefully organized documents into big trash bags on his bunk.

But U.S. District Judge Nancy Atlas in Houston, who is presiding over the insurance trial, rejected both requests.

She said the "unique circumstances" of the Lloyd's case meant there should be no delay and that Stanford should direct complaints about his detention to U.S. District Judge David Hittner, who is handling his criminal case.

Stanford faces a 21-count indictment focused on what prosecutors say is his Stanford Financial Group's fraudulent sale of certificates of deposit issued by his Antigua bank, Stanford International Bank. He also faces civil charges from the U.S. Securities and Exchange Commission.

Lloyd's at first agreed to advance Stanford's criminal and civil defense costs, but changed its mind, relying on a money-laundering policy exclusion, court records show.

Stanford is also appealing his third bail denial to the U.S. Fifth Circuit Court of Appeals, the same court that rejected his two prior bail requests. He argues his jailing has deprived him of his constitutional rights to due process and effective assistance of counsel.

In a court filing on Wednesday, Stanford's lawyers renewed their concern about the detention's effect on their 60-year-old client's health and mental state, saying Stanford is taking psychotropic drugs twice a day that "leave him in a less than fully coherent state of mind."

The criminal trial is scheduled to begin on Jan. 24, 2011.

Separately, U.S. District Judge David Godbey in Dallas has approved the appointment of a committee to represent Stanford victims, a spokeswoman for the clients said.

The committee is made up of six former Stanford clients and John Little, a court-appointed examiner for Stanford International Bank. It will work with Ralph Janvey, the court-appointed receiver for the bank, to recover assets for Stanford investors.

"We look forward to working cooperatively with the court-appointed receiver and examiner to identify and prosecute potential legal claims against third parties who assisted with Stanford's fraud," Peter Morgenstern, a lawyer for Stanford clients, said in a statement.

The Lloyd's case is Pendergest-Holt et al v. Certain Underwriters at Lloyd's of London et al, U.S. District Court, Southern District of Texas, No. 09-03712. The criminal case is U.S. v. Stanford in the same court, No. 09-cr-00342. The SEC case is SEC vs Stanford International Bank Ltd et al, U.S. District Court, Northern District of Texas, No. 09-298. (Reporting by Anna Driver in Houston and Jonathan Stempel in New York; editing by Martha Graybow editing by Andre Grenon)

Allen Stanford's Venture Capital Invetments List

Allen Stanford’s Venture Capital Investments Revealed

RECEIVER’S INTERIM REPORT REGARDING STATUS OF RECEIVERSHIP, ASSET COLLECTION AND ONGOING ACTIVITIES

Interim Report June 2010

Allen Stanford Loses Bid for Bail Before Fraud Trial

Allen Stanford the Texas financier accused U.S. of leading a $7 billion investment-fraud scheme, lost another bid for pre-trial release.

U.S. District Judge David Hittner in Houston today denied Stanford’s request for bail for the third time, rejecting arguments that the 19 months he will spend in jail before his January trial add up to a violation of his constitutional rights and that he can’t adequately ready his case while locked up.

Although conditions at Houston’s federal detention center are “much less ‘posh’ than Stanford prefers, there is no evidence that it is so burdensome as to impede his ability to prepare for trial,” Hittner wrote. Prosecutors opposed the bid, arguing the financier might disappear if freed.

Stanford, 60, is accused in a 21-count indictment of defrauding those who bought certificates of deposit issued by his Antigua-based Stanford International Bank Ltd. Held without bail since June 2009, he maintains his innocence.

Lead defense attorney, Robert Bennett of Houston, didn’t immediately return a call seeking comment. Harvard University law professor Alan Dershowitz assisted in drafting the bail request.

The case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston).

Stanford Trust Company / Stanford Fiduciary Investor Services Memorandum of Agreement

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Memorandum Regarding the Legal Authority of Stanford Trust Company Limited to Establish a Trust Representative Office in the State of Florida

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