Texas Billionaire Stanford Indicted in Massive US Fraud Case
Tabassum Zakaria - Reuters
Richmond, Virginia - Texas billionaire Allen Stanford and four associates were indicted on fraud and obstruction charges in a $7 billion pyramid scheme to bilk investors, the U.S. Justice Department said on Friday.
Sir Allen Stanford, indicted Friday for fraud and obstruction. (Photo: Joe Skipper / Reuters)
Stanford, a flamboyant 59-year-old financier, will appear in federal court in Virginia to answer allegations he orchestrated the fraud through his Antigua bank with the aid of company executives and an Antigua regulator.
He faced a 1:30 EDT hearing before federal magistrate Hannah Lauck after surrendering to FBI agents outside his girlfriend's house in Virginia late on Thursday.
His case is the first major financial crimes prosecution brought under the administration of President Barack Obama, who has vowed to crack down on economic malfeasance.
Stanford already faces civil charges by the U.S. Securities and Exchange Commission that he fraudulently sold $8 billion in certificates of deposit with improbably high interest rates from his Stanford International Bank Ltd, headquartered in the Caribbean island of Antigua.
The SEC, saying Stanford had used Antigua as a "personal playground," filed new civil charges on Friday against company officials and an Antigua regulator, saying they aided Stanford in the $8 billion Ponzi scheme, or pyramid investment plan.
Justice Department officials, including the U.S. attorney from Houston, planned a noon EDT (1600 GMT) news conference in Washington to announce the criminal charges.
Stanford, a colorful figure with a penchant for cricket, golf and publicity, holds dual U.S. and Antigua and Barbuda citizenship. He denies any wrongdoing and has said he would put up "the fight of my life" if indicted.
-------
(Writing by John Whitesides; additional reporting by Chris Baltimore in Houston and Jim Vicini in Washington; editing by Frances Kerry.)