Stanford Lawyers to Blame Feds, Economy for Investors' $7B Loss at Fraud Trial Beginning in Texas
Federal prosecutors say onetime Texas billionaire R. Allen Stanford made false representations to investors to persuade them to purchase so-called certificates of deposit at an offshore bank he controlled.
However, his defense team is expected to point the finger at the feds and the global economic downturn at the federal fraud trial that is beginning today in Houston and contend that heavy-handed government intervention destroyed the value of the ventures into which Stanford put some $7 billion in investor funds, Bloomberg reports.
Rather than misappropriating money, as prosecutors claim, Stanford funded startup companies and real-estate ventures, among other ventures, in order to provide high returns to investors in the Antiguan bank CDs, his lawyers insist. But for the interference of federal regulators, who stepped in as Stanford’s accountants were recording these assets on company books, destroying their value with a much-publicized investigation, investors’ money wouldn’t have been lost, the defense contends.
“There was a consolidation project under way, not just something they were talking about, but that they were doing,” defense attorney Ali Fazel said at a hearing last week. “The government’s contention that this is fraud is just wrong.”
Earlier coverage:
ABAJournal.com: “Federal Judge Says Allen Stanford Lawyers Can’t Quit, Must Defend Him in Upcoming $7B Fraud Trial”
