Indicted Financier R. Allen Stanford Ordered to Pay in $7.2 Billion Ponzi Scheme
A federal judge has ordered Miami financier R. Allen Stanford, serving a 110-year prison sentence, and two former colleagues to pay sums for their roles in a $7.2 billion Ponzi scheme. The judgment brings an end to the US Securities and Exchange Commission’s 16-year-old lawsuit.
Chief Judge David Godbey of the Dallas federal court imposed a $5.9 billion civil fine on Stanford, deeming it unlikely that the amount will be collected. Former chief financial officer James Davis and former chief accounting officer Gilberto Lopez were ordered to pay $17.66 million and $3.42 million, respectively.
Stanford sold fraudulent certificates of deposit through his Antigua-based Stanford International Bank, using investor funds to make risky investments and fund a lavish lifestyle. The judge also deemed billions in damages satisfied by court-appointed receiver Ralph Janvey’s recovery of over $2.5 billion for fraud victims, including $1.2 billion from Toronto-Dominion Bank.
The case, first filed in 2009, was prompted by the SEC’s concern over the scheme’s magnitude, which compared to the earlier Bernard Madoff Ponzi scheme. Stanford, once a billionaire, was declared indigent in 2010 and is ineligible for release from prison until 2103.
The judge deemed there was “no just reason for delay” in ordering the payments and closing the case. Lawyers for Davis and Lopez declined to comment, while an SEC spokesperson declined to comment further.
