Accused Ponzi Schemer Stanford Indicted For Fraud

Jun 19 2009 | 1:20pm ET

R. Allen Stanford, the Texas billionaire, fund of hedge funds manager and accused Ponzi schemer, has been indicted for fraud and obstruction of justice by federal prosecutors in Houston.

Stanford turned himself in to the Federal Bureau of Investigation yesterday in Virginia. He is due to appear in Richmond federal court today.

According to prosecutors, Stanford ran a $7 billion Ponzi scheme through his Stanford Financial Group. His firm was shut down by the Securities and Exchange Commission in February. An SEC civil complaint accused Stanford of promising big returns in investments he said were certificates of deposit, lying about their historical performance and safety. Three of his companies also had their assets frozen.

Six others were indicted along with Stanford, including Leroy King, head of Antigua’s Financial Services Regulatory Commission. King, a dual American-Antiguan citizen like Stanford, is accused of accepting bribes from the alleged Ponzi schemer, and has been on leave since March.

Also indicted—and arrested—were five Stanford executives and employees. Laura Pendergest-Holt, the chief investment officer who was already charged in February with obstruction, Gilberto Lopez, chief accounting officer, and Mark Kuhrt, global controller, were each charged with fraud and obstruction. James Davis, chief financial officer, was charged with fraud and conspiracy to obstruct an SEC investigation, while Bruce Perraud, a former global security specialist at Stanford, was charged with destroying documents.

In addition, the SEC, which had already charged Stanford, Davis and Pendergest-Holt, has added charges against Lopez and Kuhrt. The regulator says the two “reverse-engineered” Stanford International Bank’s financial statements to report nonexistent income. The SEC also charges King, saying he “looked the other way” in exchange for bribes.

RETALTED LINK:

Stanford Indictment (Court Documents)


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note