Calling it “one of the most egregious frauds” to ever be presented to a jury, on June 14 Senior U.S. District Judge David Hittner sentenced 62-year-old financier R. Allen Stanford of Houston to 110 years in prison.
In March, a federal court jury found Stanford, former chairman of Houston’s Stanford Financial Group, guilty of 13 of 14 criminal counts against him. Jurors found him not guilty of one count of wire fraud. Stanford was charged in connection with an alleged conspiracy to defraud investors who bought about $7 billion in CDs sold through Stanford International Bank (SIB).
Stanford, dressed in a green prison suit, showed little reaction to the sentence Hittner delivered shortly after noon on June 14 in a large Houston courtroom packed with people who lost money after they bought CDs from SIB. Leaders of two groups of disgruntled investors asked Hittner to impose the maximum sentence of 230 years.
Jaime Escalona, a representative of Stanford victims from Latin America, told Hittner that Stanford was a “dirty, rotten scoundrel” while Angela Shaw Kogutt, director of the Stanford Victims Coalition, said Stanford committed an “inconceivably heinous crime” that “took our lives as we knew them.”
Hittner sentenced Stanford after criminal-defense attorney Ali Fazel told Hittner he should sentence Stanford to no more than 120 months in prison and federal prosecutor William Stellmach, of the U.S. Department of Justice in Washington, D.C., sought the maximum of 230 years in prison.
Fazel, a partner in Scardino & Fazel in Houston, told Hittner that despite the government’s contention, Stanford Financial Group was not a Ponzi scheme, because the Stanford companies had made investments. Fazel said in 2008 and 2009 the troubled economy, not Stanford, was the proximate cause of the collapse of SFG.
Following Fazel’s argument, Stanford, who did not testify at trial, gave a 40-minute rambling, disjointed speech to Hittner prior to his sentencing, during which Stanford blamed the economic decline of his companies on a government receivership imposed on Feb. 17, 2009, and the “near worldwide economic collapse.” The government used “Gestapo tactics” in imposing the receivership, he told Hittner.
“I didn’t intend to — never did — to . . . personally defraud anyone,” Stanford told Hittner.
He told Hittner he wasn’t asking for sympathy or forgiveness, but said, “I’m telling you in my heart, I didn’t run a Ponzi scheme.”
“Whether I was a scapegoat, whether I just happened to be the thing to be used to deflect, I don’t know. All I know is every day . . . I do put the blame on the government for what they did. . . . I feel bad for the people, the clients who got hurt, the employees,” Stanford said in court.
“I’ve been called a lot of things — arrogant, abrasive, son-of-a-gun, difficult and very opinionated, strong-willed — like anyone in life who’s achieved the same characteristics. I’m not a thief,” he told Hittner.
Stellmach, deputy chief of the U.S. Department of Justice Criminal Division’s Fraud Section, told Hittner that Stanford’s statement was “obscene,” and the Mexia native is “one of the greediest criminals to ever appear in a criminal case.”
“Mr. Stanford proclaimed himself a scapegoat. . . . He just showed one more time his deceit and complete lack of remorse . . .,” Stellmach said. “It was a blatant Ponzi scheme. Stanford International Bank was his personal ATM.”
Stellmach said, conservatively, SFG lost $5.9 billion. [See the sentencing memo.]
A gag order that bars Stanford’s defense team and prosecutors from commenting on any aspect of the case remains in effect. Hittner said he would not lift the gag order because of the pending criminal trial of Stanford’s three co-defendants. That trial is set for September.
-- Brenda Sapino Jeffreys