Las víctimas olvidadas de Stanford ahora disponible en español

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Tuesday, March 1, 2011

SocGen, Stanford Receiver Spar Over Swiss Bank Data Subpoena

Societe Generale Private Banking (Suisse) SA urged a U.S. judge in Dallas to block subpoenas for Swiss banking records sought by the receiver for indicted financier R. Allen Stanford.

Stanford, who allegedly led a $7 billion fraud scheme, routed more than $100 million in investor funds through the Swiss bank accounts, court-appointed receiver Ralph Janvey told U.S. District Judge David Godbey in papers filed Feb. 22.

Janvey subpoenaed Stanford’s personal and business banking records in December from the Lausanne, Switzerland-based unit of Paris-based Societe Generale, France’s second-largest lender. The bank said Janvey should seek the records through international banking treaties, as the bankers could be jailed for breaking Swiss privacy laws.

“There’s no reason not to go to the Hague Convention when you have conflicts of law as serious as the one you have here,’” SocGen’s lawyer, Noelle Reed, told Godbey in court today. ”My client takes very seriously the criminal statutes we have referred to.”

Stanford, 60, is accused in civil and criminal cases of misleading investors about the nature and oversight of certificates of deposit they purchased from his Antigua-based Stanford International Bank Ltd.

The U.S. Securities and Exchange Commission sued the former Stanford Group Co. principal two years ago, resulting in Janvey’s appointment. A U.S. grand jury in Houston indicted him on 21 criminal counts four months later.

Stanford Denies Wrongdoing

Stanford, who has denied the civil and criminal allegations, is being held without bail while awaiting trial.

He is being treated for a prison-acquired prescription drug addiction at the same U.S. correctional complex where Bernard Madoff is serving a 150-year sentence for an unrelated Ponzi scheme.

Societe Generale, in papers filed with Godbey earlier today, said Janvey opted to serve the subpoena upon a bank office in Miami, rather than comply with the international legal procedures for taking evidence abroad outlined in the Hague Convention.

His demand placed bank officers at risk of criminally violating Swiss banking secrecy laws, said Reed, a Houston-based attorney with New York’s Skadden Arps Slate Meagher & Flom LLP.

“The threat of criminal punishment is real, including the possibility of imprisonment,” Reed said. “Swiss residents cannot avoid these laws simply by turning information over to their American counterparts to be ‘produced’ in this country.”

‘Given You Nothing’
Janvey’s lawyer, Kevin Sadler, told the judge today it’s “speculative” of the bank to say it will be prosecuted for breaking privacy laws.

“They’ve given you nothing that the risk of prosecution is likely or probable,” Sadler said.

More than $70 million of the money sent to the Swiss accounts was diverted to Stanford’s personal accounts and more than $1 million used to bribe Stanford International Bank’s Antiguan outside auditor, Sadler said in the Feb. 22 filing.

“This was a Ponzi scheme, and the Swiss banks are one of the conduits through which money flowed,’’ John Little, the court-appointed examiner who speaks for Stanford’s investors, told Godbey today. “This idea of going to the Hague Convention will buy us six more months or a year of delay, and that delay is killing the investors. There has to be a Swiss interest against facilitating fraud.’’

Godbey took the lawyers’ arguments under advisement and said he’d rule as promptly as possible.

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