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Ponzi Schemer Gets New Indictments
A federal grand jury has returned a new, 14-count indictment against alleged Allen Stanford, who was already accused in 2009 of running a $7 billion Ponzi scheme. Stanford was initially charged along with 3 former executives and the former top banking regulator in Antigua, the home of Stanford's offshore bank. The co-defendants' cases were separated from Stanford's last year, and the new indictment charges Stanford alone.
Accusations Against Allen Stanford. As in the earlier case, Stanford stands accused of conspiracy, wire fraud, mail fraud, obstruction of an SEC investigation and conspiracy to commit money laundering. The new indictment removes 2 counts of wire fraud and 5 counts of mail fraud, and Stanford no longer is accused of conspiracy to commit securities fraud. The changes don't significantly change the fact that Stanford faces up to 250 years in prison.
While the new indictment sharpens the focus on Stanford as a lone defendant, it's unclear whether it will do much to advance a case that has been hopelessly stalled for months. Stanford's original trial, scheduled for January, was postponed indefinitely after he became addicted to prescription drugs while in federal custody and a judge ruled him incompetent. Because of that, he is also unable to answer the new charges against him and will not attend an arraignment scheduled for 5/19/11. Stanford's court-appointed defense attorney, Ali Fazel, says that as a matter of law, Stanford cannot enter a plea. "He has been found incompetent," Fazel said. "We are on standby."Court-Appointed Receiver, Ponzi Scheme Victims. The new indictment comes at a time when investors and others touched by the Stanford scandal have been turning up the heat on the authorities in hopes of moving the case along. The delays have confounded efforts by a court-appointed receiver to recover assets for Stanford's alleged victims, because most of the missing funds are believed to be in overseas accounts. Without a guilty verdict and a forfeiture order, the funds are off limits to U.S. authorities, meaning investors are likely to see just pennies on the dollar.
The receiver, Dallas attorney Ralph Janvey, has instead been focusing his efforts in the U.S. - filing dozens of so-called "clawback" claims, including against dozens of former Stanford employees and investment advisors. One such claim targets 2 advisors widely credited with helping authorities make their case against Stanford: Charles Rawl and Mark Tidwell of Houston. The pair sued Stanford in 2007, saying they left the company due to rampant fraud, which the company denied. Rawl and Tidwell say they brought their evidence to the SEC, which sued Stanford in 2009.
Rawl, who has not spoken publicly about the case in 2 years, told CNBC exclusively this week that he and Tidwell contacted the SEC seeking help with the suit by the receiver, but were told they are on their own. Rawl believes the government is intentionally dragging its feet because authorities took so long to move in on Stanford. A 2010 SEC Inspector General's report found the agency was aware of issues at Stanford as far back as 1997. Rawl alleges the delays in Stanford's criminal case are part of what he calls a cover-up.
"The further that people dig, the more embarrassment on the government's part. I think certain people hope it just fades away." - - Charles Rawl. [CNBC.com, 5/5/11]
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