US seeks US$5.9 billion from indigent Allen Stanford

(Reuters) - In a demand more likely to remain symbolic than be fulfilled, the U.S. government wants Allen Stanford to forfeit US$5.9 billion from his massive Ponzi scheme, even though the convicted financier has been declared indigent.

Allen Stanford

The demand requires court approval, and was made two days before Stanford, who was once considered a billionaire, is to be sentenced for operating a multi-billion dollar fraud. Stanford, 62, could spend the rest of his life behind bars.

According to a Tuesday filing with the U.S. District Court in Houston, the government said the US$5.9 billion represents a sum that Stanford’s Antigua-based bank had received from investors in certificates of deposit when it was put into receivership in February 2009.

Prosecutors said Stanford International Bank Ltd had US$7.2 billion of CD account balances at that time, of which US$1.3 billion was fictitious interest.

“While US$5.9 billion is clearly a massive amount of money, it is not at all excessive” given Stanford’s involvement, U.S. Attorney Kenneth Magidson said in a court filing.

He called the requested amount “conservative,” but said it might be harder to prove a higher amount given the duration of Stanford’s fraud and lack of complete records.

Ali Fazel, a lawyer for Stanford, said his client opposes the forfeiture motion. Magidson’s office did not immediately respond to a request for comment.

Once considered a billionaire but declared indigent in 2010, Stanford was convicted on March 6 by a federal jury on fraud, conspiracy and obstruction charges related to his alleged two-decade scam, centered on the sale of bogus CDs.



Join the Conversation

After you comment, click Post. If you're not already logged in you will be asked to log in or register.

The Comments section is intended to provide a forum for reasoned and reasonable debate on the newspaper's content and is an extension of the newspaper and what it has become well known for over its history: accuracy, balance and fairness. We reserve the right to edit/delete comments which contain attacks on other users, slander, coarse language and profanity, and gratuitous and incendiary references to race and ethnicity. We moderate ALL comments, so your comment will not be published until it has been reviewed by a moderator.