SEC files new charges in the Stanford Ponzi scam case

Officials at the U.S. Justice Department reported last week that Texas billionaire Allen Stanford, three associates and a top Caribbean regulator were indicted on fraud, conspiracy and obstruction charges in an elaborate $7 billion pyramid scheme to bilk investors, says Reuters. A federal judge ordered Stanford to be transferred to Houston for a hearing on whether he should be granted bail on charges he orchestrated the fraud through his bank on the Caribbean island of Antigua.

If convicted on all the charges brought by a grand jury in Texas Stanford could face life in prison. Stanford and executive Laura Pendergest-Holt, accountants Gilberto Lopez and Mark Kuhrt and Antigua's top regulator, Leroy King, were charged with 21 counts alleging they organized a large scale scheme to deceive investors, fabricate financial statements and hide their fraud.

Meantime Stanford himself declines any wrongdoing and his lawyer says that they will fight the allegations. Assistant Attorney General Lanny Breuer said that Stanford and associates misappropriated most of the $7 billion held in investors' funds and so far less than $2 billion in recoverable assets had been identified.

Currently Stanford faces civil charges by the Securities and Exchange Commission that were brought in February. He was accused of fraudulently selling $8 billion in certificates of deposit with improbably high interest rates from his Stanford International Bank Ltd, headquartered in Antigua.

On Friday the SEC filed new civil charges against the company officials and the Antigua regulator on the grounds they supported Stanford in organizing Ponzi scheme.

Later Antigua and Barbuda's attorney general reported that King had been dismissed from the post he had previously occupied as head of the Antigua and Barbuda Financial Services Regulatory Commission. Further in the complaint the SEC alleged that Pendergest-Holt and James Davis, Stanford's one-time roommate at Baylor University, misappropriated billions of dollars and falsified company financial statements.

It said Davis, Lopez and Kuhrt developed elaborate methods to handle and hide financial information, transferring it to portable memory drives and deleting it from U.S.-based servers and flying paper files on Stanford's private jets to Antigua, where they were burned.

Stanford used some of the funds to finance his "personal playground" in Antigua, the complaint alleged, including a restaurant called the "Sticky Wicket" and "Stanford 20/20," an annual cricket tournament boasting a $20 million purse.