Pat Sullivan, Associated Press
HOUSTON — A prosecutor asked jurors on Wednesday to allow federal authorities to seize $330 million from nearly 30 accounts controlled by convicted Texas tycoon R. Allen Stanford and others, saying the funds are proceeds from the financier's massive Ponzi scheme and can be traced back to investors who lost billions.
Stanford's attorney countered prosecutors didn't prove that all of the money from these accounts — which belonged to Stanford, his companies and one of his girlfriends — can be connected back to investors.
The claims by prosecutors and defense attorneys were part of a brief criminal forfeiture proceeding that followed Stanford's conviction by this same jury on Tuesday on 13 of 14 fraud-related counts for orchestrating a scheme that took more than $7 billion over 20 years from investors who bought certificates of deposit, or CDs, at his bank on the Caribbean island nation of Antigua. Prosecutors said Stanford told investors their funds were being safely invested when he actually spent it on his failed businesses and on a lavish lifestyle that included yachts and jets.
After testimony from a U.S. postal inspector on the accounts, jurors heard closing arguments in the forfeiture proceeding and decided to beginning deliberating on Thursday.
Postal inspector Clayton Gerber, the only witness in the proceeding, told jurors that $2.5 million of what authorities are trying to seize was traced to one of Stanford's girlfriends. The money was used to help Rebecca Reeves-Stanford buy two homes and also went to a bank account in the Cook Islands in the South Pacific that she controlled and was dubbed the "Baby Mama Trust," he said.
Reeves-Stanford had two of the financier's children and has been described by authorities as one of his "outside wives." Stanford is married but is going through a divorce.
If the jury decides the $330 million can be traced back to CD depositor funds, federal authorities can then attempt to seize the money that has been frozen in the accounts, located in countries including Switzerland, Britain and Canada.
That $330 million "doesn't belong to Mr. Stanford, (it) doesn't belong to his companies and (it) doesn't belong to his families," prosecutor Andrew Warren said during closing arguments.
Ali Fazel, one of Stanford's attorneys, told jurors prosecutors were wanting them to make a leap and assume all of the money in these accounts came from CD depositors.
"I'm asking you not to do that. If they can't prove it to you ... then it should be take nothing," he said.
If the jury rules in the prosecution's favor, it wouldn't necessarily mean the federal government would get the money as liquidators appointed by the Antiguan Court are also vying for control of many of these same accounts. Authorities say the process to get the funds could take years.
An attorney for Reeves-Stanford did not immediately return a telephone call seeking comment.
But in court documents related to a U.S. Securities and Exchange Commission lawsuit filed against the financier, Reeves-Stanford and her attorneys have said she didn't commit fraud.
A sentencing date for Stanford is not expected to be set until after the jury makes a decision in the forfeiture proceeding. The most serious charges against Stanford carry up to 20 years in prison, and if he is ordered to serve his sentences consecutively, the 61-year-old could spend the rest of his life behind bars.
Stanford's attorneys portrayed him as a visionary entrepreneur who made money for investors and conducted legitimate business deals. He did not testify in his own defense.
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