Las víctimas olvidadas de Stanford ahora disponible en español

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Friday, September 16, 2011

Swiss Bank Under Investigation‏


The Justice Department is investigating whether French bank Société Générale SA helped facilitate Texas financier R. Allen Stanford's alleged $7 billion Ponzi scheme by ignoring suspicious transactions, people familiar with the matter said.

At issue is a Swiss bank account held by one of Mr. Stanford's companies at SG Private Banking (Suisse) SA, a Société Générale subsidiary, that was allegedly funded with investors' money and used to make payments into Mr. Stanford's personal accounts and for bribes to his Antiguan auditor. Prosecutors in the criminal probe are examining whether Société Générale failed to follow due diligence procedures or to ask questions about irregular banking activity, the people familiar with the matter said.

Mr. Stanford, 61 years old, was accused by federal prosecutors and the Securities and Exchange Commission in 2009 of fabricating high returns to lure investors around the world to buy about $7 billion worth of certificates of deposit from Stanford International Bank Ltd. in Antigua, the island where he was knighted.

"Sir Allen," as he was sometimes known, spent millions to travel by private jet, sponsor cricket matches, and buy real estate in the Caribbean and elsewhere. He has pleaded not guilty to charges of fraud, conspiracy and obstruction in Texas.

In a court filing in Mr. Stanford's criminal case last year, federal prosecutors wrote that he "secretly funnelled more than $100 million of investors' money through his numbered Société Générale account in Switzerland to his personal bank accounts for the payment of bribes and lavish personal expenditures."

That the bank is a focus of prosecutors' interest hasn't previously been disclosed.

SG Private Banking (Suisse) "has received requests for documents and other information" related to Mr. Stanford from the Justice Department, a Société Générale spokesman said in a statement. He said the bank is cooperating but will not comment further because it is an on-going investigation.

R. Allen Stanford at the federal courthouse in Houston in April 2010.

If the Justice Department concludes that the bank turned a blind eye to potential criminal activity, that could be a basis for a prosecution under the federal anti-money laundering statute, the Bank Secrecy Act, or other conspiracy or fraud charges, lawyers not involved in the case said. A Justice Department spokeswoman declined to comment. However, defense lawyers say it would be highly unusual to criminally prosecute a bank for facilitating a fraud based on the failures of its employees to uncover it. "At that level, prosecutions are reserved for the bad actor, unless you are prepared to say that the bank has a systemic problem and is corrupt at its core," said Robert W. Ray, a white collar defense lawyer at Pryor Cashman LLP.

People familiar with the matter said the focus for prosecutors is trying Mr. Stanford and any action against the bank is likely to wait until after the proceedings involving Mr. Stanford are finished. His case has been on hold as aA judge is expected to determine in the coming months whether he is competent to stand trial.

The probe shows that after more than two years investigators are still trying to unravel the global fraud allegedly carried out by Mr. Stanford and his associates. Mr. Stanford's companies utilized accounts at several Swiss banks, according to court documents and people familiar with the matter.

The investor money that prosecutors allege was siphoned off by Mr. Stanford for bribes and other purposes through Société Générale related to an SG Private Banking account numbered 108731 in the name of Stanford Financial Group, a parent entity for the many Stanford companies. The Swiss account was allegedly funded with investor money transferred from Stanford International Bank accounts, according to the people familiar with the situation and records filed in court.

Prosecutors have said that 108731 was a "secret account" because it wasn't included in the Stanford corporate accounting system, and because only Mr. Stanford and his chief financial officer, James Davis, had access to it. The account was overseen by Blaise Friedli, an SG Private Banking executive vice president in Lausanne, Switzerland, who Mr. Stanford named to his company's "international advisory board," according to a corporate newsletter filed in court.

A former lawyer for Mr. Stanford, Dick DeGuerin, said at a 2009 hearing that 108731 was "not a secret bank account," and that records would show funds didn't go to Mr. Stanford, "but were used within the Stanford companies." Mr. Davis has pleaded guilty to criminal charges and is cooperating with authorities. Mr. Friedli didn't respond to requests for comment.

Some of the investor money in the 108731 account was used for allegedly illegal transactions, prosecutors have said in filings and in court. Mr. Stanford also used investor funds in the 108731 account as collateral for a $95 million loan Société Générale gave him around 2004, according to people familiar with the situation. Money from the loan was allegedly spent on bribes and transferred into Mr. Stanford's personal accounts, the people familiar with the matter said.

In December 2008, as his alleged scheme began to fall apart amid investor redemptions, Mr. Stanford's company authorized the bank to take the funds that were used as collateral out of the 108731 account to repay the loan, the people said.

Prosecutors are investigating whether Société Générale did proper due diligence on the loan to Mr. Stanford and how it was spent, and why the bank didn't identify or report that investor money was being used for suspicious transactions, the people said.

A lawyer for Mr. Stanford, Ali Fazel, declined to discuss the case or the Société Générale accounts, citing a gag order. "We disagree with the government's theory of the case and we are looking forward to the trial to be able to show that," Mr. Fazel said.

Mr. Davis regularly corresponded with Mr. Friedli, making written requests for wire transfers of millions of dollars to Mr. Stanford's personal accounts, and payments of up to $125,000 to the Antiguan auditor's accounts in London and the British Virgin Islands, court filings show. Prosecutors have said in court filings that the payments to the auditor were bribes.

A phone number for the auditor, CAS Hewlett & Co., has been disconnected. The owner of the company, Charles Hewlett, died in 2009.

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