Allen Stanford, the billionaire Texan accused of an $8 billion fraud by US regulators, has refused to cooperate in the government’s probe, a court filing showed yesterday.
The US Securities and Exchange Commission has charged Stanford, two of his top aides and three of his companies with operating a long-running fraud involving high-yield certificates of deposit. He is also accused of misappropriating $1.6 billion in investor funds.
“I hereby assert my privilege against self-incrimination under the Fifth Amendment to the United States Constitution and decline to testify or provide an accounting, and will continue to decline to testify, provide an accounting or produce any documents related to the matters set forth in the Commission’s complaint,” he said in a document dated March 9 that was filed in US District Court in Dallas.
In a prior court filing, Stanford’s attorney Charles Meadows has said the SEC’s claims were false.
Stanford Chief Financial Officer James Davis, who is also accused of the fraud, has said he would not cooperate with the government’s civil investigation.
James Cox, a corporate securities and accounting expert at the Duke University School of Law, said Stanford did not have much to gain by helping the SEC in its investigation.
“This really ups the sanction the SEC is likely to impose,” Cox said. “But his lawyers likely told him there is not much to gain from being cooperative in this case.”
Stanford, 58, and the others are accused of a long-running Ponzi scheme using CDs issued by his offshore bank in Antigua. The CDs were falsely peddled as safe and liquid investments, the SEC charges.
James Stanford, Stanford’s 81-year-old father who is a member of the Antigua-based Stanford International Bank’s board, talked to SEC investigators on February 24, but did not answer many questions about the business, the filing showed. Another board member, Mexia, Texas, resident O.Y. Goswick, was too ill to answer an SEC subpoena, according to a letter from his lawyer.
Laura Pendergest-Holt, who was the company’s chief investment officer, faces the civil fraud charges and one criminal count of obstructing the SEC’s investigation.
She had previously talked to the SEC, and her lawyers said she was helping the court-appointed receiver in charge of Stanford’s assets before her arrest on February 26.
Stanford, a brash patron of cricket and other sports who has luxury homes in Houston, the Caribbean and Miami, has kept a low profile since the FBI served him with court papers in Fredericksburg, Virginia.
He has surrendered his passport and a court-appointed receiver has frozen his assets.