Texas billionaire Allen Stanford was set to appear in a federal court in Virginia yesterday over allegations of massive fraud involving his Antigua bank, US officials said after he surrendered to the FBI.
Stanford is expected to be transferred to Houston after his initial court appearance to face criminal charges in a sealed indictment, a federal official said on condition of anonymity.
The golf and cricket promoter already faces civil charges brought by the US Securities and Exchange Commission (SEC) that he fraudulently sold US$8 billion in certificates of deposit with improbably high interest rates from his Stanford International Bank Ltd, headquartered in Antigua.
Stanford, 59, was spending the night in a Virginia jail and was due to appear before a federal magistrate judge yesterday morning in Richmond, the federal official said.
“He surrendered,” Dick DeGuerin, Stanford’s Texas attorney, said by telephone on Thursday after speaking with his client. “He’s in FBI custody.”
The Justice Department and the FBI declined to comment on Stanford’s arrest.
Justice Department officials, including the US attorney from Houston, planned to hold a news conference yesterday in Washington to announce the criminal charges.
Stanford, who holds dual US and Antigua and Barbuda citizenship, denies any wrongdoing and has said he would put up “the fight of my life” if indicted.
“If the SEC had not come in and disemboweled a living, breathing strong organization the way they did, there’s no question on God’s green earth that everyone would have been made whole and we would have had a lot of money left over,” Stanford said in an interview in April.
In its civil case, the SEC in February accused Stanford, his college roommate and three of their companies of carrying out a “massive Ponzi scheme” over at least a decade and misappropriating at least US$1.6 billion of investors’ money.
“This starts to bring closure for the victims,” said Jacob Frenkel, a former SEC enforcement official, referring to the criminal indictment.
Stanford now faces concrete charges and “is no longer swinging at a pinata,” said Frenkel, now an attorney in Rockville, Maryland.
Before the SEC leveled the fraud charges, Stanford’s personal fortune was estimated at US$2.2 billion by Forbes magazine. He was a generous sports patron and owned homes in Antigua, St Croix, Florida and Texas.
To date, the only Stanford official to have faced criminal charges is Laura Pendergest-Holt, the chief investment officer for the Stanford Financial Group. She was arrested by the FBI in February and later freed on bail.
Pendergest-Holt and James Davis, Stanford’s one-time roommate at Baylor University who served as the company’s chief financial officer, were both named in the SEC’s civil complaint.
Davis has not been charged with criminal activity and is cooperating with federal authorities, although his attorney has said he expects his client to be indicted.
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