Texas Billionaire Busted For Ponzi Scheme
A phalanx of black SUVs filled with FBI agents was waiting outside his Virginia residence Thursday, according to his attorney, Dick DeGuerin.
"He walked out and asked if they had a warrant," DeGuerin said. He said Stanford told them to arrest him if they had a warrant and said if they didn't he would go back to Houston Friday to turn himself in. Stanford surrendered, said DeGuerin.
Stanford, chairman of the troubled Stanford Financial Group, is scheduled to appear in federal court Friday on fraud charges. Authorities plan to unseal an indictment charging Stanford, law enforcement officials said, speaking on condition of anonymity because they were not authorized to discuss the case.
A grand jury in Houston has been investigating Stanford Financial Group. The Securities and Exchange Commission filed civil charges earlier this year accusing Stanford and his top executives of conducting an $8 billion fraud by advising clients to buy certificates of deposit from the Antigua-based Stanford International Bank.
The SEC's lawsuit charged that the bank advertised its CDs in a brochure touting a conservative investment philosophy. But instead the bank's portfolio was "misappropriated by Defendant Allen Stanford and used by him to acquire private equity investments and real estate," the suit says.
An amended complaint by the SEC has accused Stanford and his finance chief, James M. Davis, of conducting a "massive Ponzi scheme" in which early investors were paid returns from money put in by later investors. Davis promised in April to cooperate with federal investigators.
Stanford has maintained his innocence.
Laura Pendergest-Holt, chief investment officer of Stanford's parent company, is also facing criminal charges, in her case of obstructing the SEC's investigation by lying about her knowledge of the firm's activities and omitting key details.
"We heard the grand jury has been active, and we fully expect indictments," her attorney Jeff Tillotson told the AP. "We obviously deny that our client has committed any crime."
He has said she was "set up" by Stanford.