FBI agents are investigating U.S. regulators' allegations of a "massive' fraud by Houston billionaire R. Allen Stanford and companies he ran, a person familiar with the case said, dpa reported.
The U.S. Securities and Exchange Commission yesterday sued Stanford and two aides, accusing them of orchestrating a fraud involving $8 billion placed by investors with Stanford International Bank and two related firms.
No criminal charges have been filed against Stanford or his co-defendants in the SEC case: Stanford's Chief Financial Officer James M. Davis and Laura Pendergest-Holt, chief investment officer of the Stanford Financial Group. Federal marshals shut down the Houston office of Stanford Group Co. yesterday.
"The SEC case is a precursor for the criminal investigation and inevitable criminal charges," said Houston attorney Dan Cogdell, who defended several Enron Corp. executives against federal securities fraud charges.
Based on allegations in the SEC complaint, prosecutors might have grounds to charge some of the defendants with mail fraud, bank fraud, securities fraud, money laundering "and a host of less felonious acts," he said.
Houston U.S. Attorney's Office spokeswoman Angela Dodge referred questions regarding possible charges against Stanford to the SEC. Alfredo Perez, a spokesman for the U.S. Marshal's office in Houston, said he wasn't aware of any arrest warrants for the three executives, which he said wouldn't be issued until any charges are filed.
Whereabouts Unknown
The SEC said today that Stanford's whereabouts aren't known. Federal officials were unable to say if Stanford has retained a lawyer or been served with SEC-requested court orders freezing his personal and companies' assets.
Houston criminal defense lawyer Ron Woods, a former U.S. Attorney in Houston and ex-agent of the Federal Bureau of Investigation who helped defend former Enron CEO Jeffrey Skilling, said SEC complaints typically precede criminal charges in white-collar cases.
"With Enron, the SEC filed its case real early," Woods said. "Then, when the criminal case came along, the SEC case tagged along with it."
Stanford advisers fraudulently sold up to $8 billion in certificates of deposit linked to Antigua-based Stanford International Bank, according to the SEC complaint, which was filed in Dallas federal court.
Stanford sales staff told investors that the CDs were safe, liquid investments similar to federally insured CDs issued by U.S. banks, and were overseen by a team of company analysts and by Antiguan banking regulators, the SEC complaint states.