Stanford denies $7bn scam

Allen Stanford, the Texas financier accused of swindling investors in a $7 billion Ponzi scheme, pleaded not guilty to fraud and was returned to jail after being unable to immediately post bail last Thursday.

Stanford, 59, in handcuffs and an orange prison jumpsuit, entered his plea before US Magistrate Judge Frances Stacy.

Stanford is best known as a sports promoter who spent hundreds of millions trying to raise the standard of the West Indies team. His Stanford Superstars side – effectively the West Indies team – famously beat England in a 20/20 match last November and grabbed all $20 million prize money. Unfortunately for some of the West Indies players who invested their $1m winnings back into his company, they lost it all.

He also spent millions raising cricket standards around the Caribbean. Cayman benefitted by tens of thousands of dollars from his largesse.

Cayman sports event company Kelly Holdings worked with Stanford for the two Stanford 20/20 events in Antigua.

Stanford also heavily sponsored many other sports including golf and tennis. Top golfer Vijay Singh has continued to wear the Stanford logo whilst playing and at the time of going to press even offered to put up his bail money of $500,000.

Stanford faces charges of conspiracy, fraud, obstruction, and money laundering. He’s accused of deceiving investors about the nature and oversight of certificates of deposit sold through his Antigua-based Stanford International Bank Ltd.

Assistant US attorney Paul Pelletier said prosecutors would appeal Stacy’s decision granting Stanford’s request to be released before trial. The judge put her order releasing Stanford on hold.

Stanford sat calmly at the defense table once the bond portion of the hearing began. More than two dozen members of his family were in the courtroom.

Stanford’s lawyer, Dick DeGuerin, said he will need a year to prepare for trial, which he anticipates will last six months.

‘We’re just barely into it,” DeGuerin told Stacy. ‘There are records from all over the world. Even the government doesn’t have all the records. This is a massive case.”

Federal prosecutor Paul Pelletier presented Jeffrey Ferguson, a forensic accountant, who testified about efforts to trace depositor funds transferred out of Stanford International Bank.

DeGuerin objected that Ferguson may not have access to complete records.

Stacy allowed the evidence to be presented for the bond hearing, taking into consideration DeGuerin’s objections.

Pelletier asked Ferguson if, after tracing depositor redemptions, investments and other normal banking expenditures, if there was ‘still a $1.186 billion hole that you cannot account for.” Ferguson replied there was.

Under questioning by DeGuerin, Ferguson wouldn’t characterize the case as a Ponzi scheme. ‘I haven’t formulated an opinion on that yet,” he testified. ‘I can’t tell you one way or the other.”

Four other people, including a former Antiguan banking regulator, accused of taking bribes from Stanford, were indicted with Stanford.