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Friday, February 17, 2012

Texas financier Stanford to begin defense in fraud trial after 3-week long prosecution case

by: JUAN A. LOZANO , Associated Press Updated: February 15, 2012

HOUSTON - Attorneys for jailed Texas tycoon R. Allen Stanford on Wednesday began their defense in his fraud trial after prosecutors rested their case following three weeks of testimony in support of their claims the financier was behind a massive Ponzi scheme that took billions from investors.

The start of Stanford's defense was briefly delayed as his attorneys asked U.S. District Judge David Hittner for time to discuss how they would proceed.

"We've been in discussions with our client on what is wise, what the next step would be," said Robert Scardino, one of Stanford's attorneys. Scardino had initially asked for the rest of Wednesday to discuss trial strategy with Stanford but Hittner only gave them an hour.

The request by Stanford's attorneys came after Hittner denied their motion to dismiss all charges against the financier because prosecutors had failed to prove their case. Such motions are typically argued after prosecutors finish presenting a case and are usually denied.

After consulting with Stanford, Scardino gave Hittner a list of 26 potential defense witnesses. Scardino said he was not sure if all of them would testify. Although Scardino had previously said Stanford would, his name was not on the list. However, Stanford's attorneys could decide later to put their client on the witness stand. A gag order prevents defense attorneys and prosecutors from discussing the case.

Before resting, federal prosecutors methodically presented evidence, including testimony from ex-workers of Stanford's companies as well as emails, financial statements and other documents, that they allege show the flamboyant businessman orchestrated a 20-year scheme that bilked more than
$7 billion from investors through the sale of certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua. They allege Stanford lied to depositors by telling them their funds were being safely invested.

Defense attorneys have tried to show the financier was a savvy businessman whose financial empire, headquartered in Houston, was legitimate. They said he was trying to reorganize his businesses to pay back investors when authorities seized his companies.

The first two witnesses for Stanford were a retired FBI agent and a retired U.S. Customs investigator who told jurors about the work they did on a committee in the late 1990s to strengthen banking and money laundering laws in Antigua.

Patrick O'Brien, the former U.S. Customs investigator and a retired attorney who had done legal work for Stanford, told jurors the financier was the "driving force" behind this effort to improve Antigua's banking laws.

When questioned by a prosecutor, Lloyd Harrell, the retired FBI agent who had done investigative work for Stanford's bank, testified he and others on the committee were paid by the Antiguan government through a loan it had received from another bank on Antigua also owned by Stanford.

The prosecution's star witness - James M. Davis, the former chief financial officer for Stanford's various companies - told jurors his ex-boss used CD deposits to bribe Antiguan bank regulators. Davis also said Stanford funnelled money to pay for various businesses, most of which failed, and to pay for a lavish lifestyle that included yachts and private jets.

Stanford' attorneys accused Davis of leading the fraud and questioned his character, including highlighting extra marital affairs he's had. They also accused him of lying so he could get a reduced sentence. Davis pleaded guilty to three fraud and conspiracy charges in 2009 as part of a deal he made with prosecutors for a possible reduced sentence.

Testimony was to resume on Thursday.

1 comment:

  1. Can't wait for this to finish so all people involved would be calm.