Friday June 19, 04:42 PM
Stanford to face federal court on fraud charges
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WASHINGTON (AFP) - Texan billionaire financier Allen Stanford, accused of masterminding an eight-billion-dollar scam, was on Friday scheduled to appear in federal court after surrendering to the FBI, officials said.
An indictment against Stanford was expected to be unsealed during his arraignment hearing at a federal court in Richmond, Virginia.
The hearing, federal prosecutors said, was set for 1:30 pm (1730 GMT) before Judge M. Hannah Lauck.
A grand jury in Houston, Texas has been investigating Stanford Financial Group, whose headquarters in the city were raided in February by federal authorities. The company's assets were also frozen, along with the wealthy cricket mogul's personal accounts.
The Securities and Exchange Commission (SEC) charged in its lawsuit that Stanford and his top finance executive James Davis operated a "massive Ponzi scheme" by paying investors returns on certificates of deposit using money from other investors rather than from gains on investments.
FBI spokesman Richard Kolko confirmed to AFP that Stanford, who in April said he would "die and go to hell" if he ran the alleged scam, was in FBI custody after having surrendered to federal agents in Stafford, Virginia.
Stanford's chief investment officers Laura Pendergest-Holt is also expected to face fresh fraud charges under the criminal indictment.
Pendergest-Holt, the first Stanford executive to face criminal charges, was indicted on May 12 on two counts of obstruction of justice.
The wait on formal charges -- now four months after the first allegations -- miffed Stanford so much that in May, he even tried turning himself in to federal marshals in a publicity stunt.
Legal experts say the delay was likely due to behind-the-scenes machinations to get his lieutenants to trade information for amnesty.
Stanford's case is the most high-profile alleged fraud scheme since the SEC charged Wall Street financier Bernard Madoff with carrying out a 50-billion-dollar pyramid scheme in December. At his June 29 sentencing, Madoff could face a 150-year prison sentence.
When the allegations against Stanford surfaced, investors swarmed his closed offices and affiliated banks across the United States, Europe, Latin America and the Caribbean to regain lost investments.
Several governments seized Stanford banks and froze their assets with concern the global reach of the billionaire's banking operations could complicate the return of an estimated 50 billion dollars in assets belonging to an estimated 50,000 clients in 140 countries.
In April, a tearful Stanford, 59, lashed out in his first interview after being accused at being "robbed" of his Forbes magazine title of 405th wealthiest person in the world.
"Baloney. Baloney... It's not a Ponzi scheme. If it was a Ponzi scheme, why are they finding billions and billions of dollars all over the place?" he told ABC News.
Born in rural Mexia, Texas, the mogul now sports the clipped mustache and Saville Row style of English aristocracy.
Stanford was the man behind the eponymous Stanford Super Series Twenty20 cricket competition, which culminated with his team of hand-picked Caribbean Superstars last year defeating England at his own ground on the Caribbean island state of Antigua and Barbuda.
The England and Wales Cricket Board cut ties with him after the allegations surfaced.
Stanford was knighted in 2006 by the governor-general of Antigua, where his company was the second-largest employer.
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