More On Legal & Compliancefrom The Advisor's Professional Library
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R. Allen Stanford was sentenced to 110 years in prison on Thursday after orchestrating a $7 billion international fraud that fueled an illicit lifestyle while bilking investors. To the end, Stanford insisted that he did nothing wrong, and his attorneys said that both the conviction and the sentence will be appealed.
Bloomberg reported that the sentence, imposed by U.S. District Judge David Hittner in Houston, was 40 years shorter than that given to Bernard Madoff in the wake of Madoff’s Ponzi scheme. Hittner, who also ordered Stanford to forfeit $5.9 billion, said he had been found guilty of “one of the most egregious criminal frauds ever presented to a jury in federal court.” In March, Stanford was convicted of 13 charges that included five for mail fraud and four for wire fraud.
Stanford was found to have lied to investors who bought certificates of deposit that were issued by his Antigua-based Stanford International Bank Ltd. and sold by his Houston-based securities firm. Prosecutors said that he secretly borrowed $2 billion from his bank, and used investor funds to finance failing businesses, yachts and cricket tournaments.
Jurors disagreed with defense arguments that investors were given adequate disclosures of how their money was being spent and that Stanford’s finance chief, James Davis, was the one guilty of wrongdoing. Davis pleaded guilty to fraud and was a witness for the prosecution.
Assistant U.S. Attorney William Stellmach was quoted saying before the judge at the sentencing hearing, “From beginning to end, he’s treated his victims like road kill. Allen Stanford doesn’t deserve anyone’s sympathy, and he doesn’t deserve your honor’s mercy.” The prosecution asked for a 230-year term, while the defense requested a 10-year term.
One of Stanford’s attorneys, Ali Fazel, said in the report, “We’re very disappointed in the outcome. It’s a harsh punishment, and it’s tough on him. He is upset because he feels like he didn’t do anything.” Stanford showed no visible reaction to the sentence.
In a 30-minute address to the judge, Stanford said, “I’ve been called a lot of things—arrogant, abrasive, a son of a gun, difficult, very opinionated and strong-willed. But I am not a thief. I never planned to, never did, either corporately or personally, defraud anyone and never set out to do that.”
He also said, “I worked my butt off for 30 years to build this company.” Later he added, “If we’d been allowed, we could have liquidated every single asset and paid off every single depositor liability and every single depositor and still had significant and substantial assets remaining.”
Stellmach disagreed, saying in the report, “Stanford is proclaiming himself a scapegoat. According to him, he’s the only true victim in this case. That shows the depth of his deceit and lack of remorse that have been his trademark. That’s obscene.”
The judge said that he had read all 350 letters received from victims, and said, “Stanford ruined the lives of thousands of victims all over the world who entrusted him with their life savings.”
One victim, Angela Shaw Kogutt, said in her letter, “He treated our savings like they were Monopoly money. Make sure the knight never sees the light of day again.” The Antiguan government had conferred a knighthood on Stanford, hence the reference in the letter; later the honor was rescinded.