Las víctimas olvidadas de Stanford ahora disponible en español

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Thursday, March 8, 2012

victims' money went to mistress, luxury homes

By Terri Langford
Wednesday, March 7, 2012

Jurors who convicted R. Allen Stanford of fraud heard Wednesday how $330
million of investors' money went to his international accounts and to help
buy two luxury homes for his mistress.

The jurors are considering a U.S. Justice Department move to go after
foreign bank accounts linked to Stanford. Although the 14-count indictment
against him described the government's intention to seek the forfeitures,
jurors didn't know until they convicted Stanford on 13 counts Tuesday that
they would stay to hear the forfeiture motion.

The jury convicted Stanford of running a $7 billion investment fraud using
certificates of deposit issued by his Stanford International Bank in the
Caribbean nation of Antigua. The CDs were marketed to customers of companies under the umbrella of Houston-based Stanford Financial Group.

After testimony ended Wednesday afternoon in the forfeiture hearing before
U.S. District Judge David Hitter, prosecutors argued that CD funds from
Stanford International Bank ended up in accounts the government wants to
seize. Jurors will deliberate starting Thursday morning.

"There's no doubt, no dispute that the money came from Stanford
International Bank," Justice Department lawyer Andrew Warren told jurors.

The only witness in the hearing was U.S. Postal Inspector Clayton Gerber,
who described how 29 bank accounts contained funds from Stanford clients who invested in Stanford International Bank CDs.

"The entire source of funds were CD depositors' money," Gerber said.

In closing defense arguments, lawyer Ali Fazel zeroed in on Gerber's
testimony that he did not know the origin of the accounts' deposits before
2000, suggesting that some of the funds could have come from other sources
than CD investors.

"They want you to assume these are CD monies, all of it," Fazel told jurors.

The U.S. Securities and Exchange Commission shut down Stanford's operations
in February 2009, and a court-appointed receiver seized U.S. assets of his
international financial network.

The bank accounts the jury is reviewing now were in other countries.

Gerber's testimony included tracing funds from investors' CDs to the
purchase of two Florida homes for Rebecca Reeves-Stanford, the mother of two of Stanford's six children. Despite the hyphenated name, she and Stanford were not married, and Stanford never has divorced his first wife.

According to previous testimony, CD funds in Stanford International Bank
were transferred to his Swiss bank account. Gerber described a series of
nine transactions starting in 2002 by which $11 million moved from the Swiss account into one of Stanford's JPMorgan Chase accounts in Houston.

From there, more than $1 million was wired to help pay for Reeves-Stanford's luxury home in Boca Raton, Fla.

Three years later, the Boca Raton home was sold and proceeds were used to
buy another home for Reeves-Stanford in Key Biscayne, Fla.

In May 2009, three months after the receiver seized Stanford's U.S. assets,
the Key Biscayne house sold for $2.54 million. Of that, $2.5 million went to a bank in the Cook Islands and into an account called "Baby Mama Trust,"
which listed Reeves-Stanford as the sole beneficiary.

A few months later, about $1.5 million went from there to an Isle of Man
bank account and $1 million to a Swiss bank account.

The government contends that the Baby Mama Trust account and the 28 others
contained CD proceeds taken unlawfully from investors.

Stanford's investor victims eventually could get a share of whatever assets
are recovered through the receivership or forfeiture, although they would
get far less than they lost.

According to trial testimony, much of investors' money went to Stanford's
yachts, beachfront estates and other luxuries, or to pet business operations.

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