Stanford clients comforted by arrest, still angry

BOSTON (Reuters) - Investors burned by Texas billionaire Allen Stanford took solace from his indictment on Friday, but many remained devastated by their losses and frustrated at their inability so far to recover the money.

Retired school teachers, corporate executives, small business owners and others who entrusted their life's savings to Stanford applauded his arrest in Virginia and indictment on federal fraud, conspiracy and obstruction charges.

"I have spent months assuring my clients that Stanford will be arrested and that he will go to prison," said Randy Pulman, managing partner at law firm Pulman, Cappuccio, Pullen & Benson LLP in San Antonio, Texas.

"So there is some relief from that," said Pulman, whose clients had roughly $49 million invested with Stanford.

But the arrest does little to ease the pain of the 30,000 investors the SEC estimates were affected by what federal officials describe as a $7 billion pyramid scam executed by Stanford, three associates and a top Caribbean regulator.

The 59-year-old Stanford is accused by the U.S. Securities and Exchange Commission of having fraudulently sold $8 billion in high-yield certificates of deposit issued by Stanford International Bank Ltd in Antigua.

He has denied all wrongdoing.

"I've seen grown men break down and cry," said Angela Shaw, who invested $2 million with Stanford and now heads the Stanford Victims Coalition, referring to those who lost money to the tycoon.

"Men who are 70, 80 years old and are trying to support their families. It's absolutely horrible," she said.

It is unclear how much money Stanford's clients, who lived in the United States, Latin America, the Caribbean and Europe, will get back.

Officials in the twin-island nation of Antigua and Barbuda, where Stanford was a citizen, have identified $500 million to $1 billion in assets in his offshore bank against $7.2 billion in obligations, according to the Antiguan liquidator of the bank.

Nigel Hamilton-Smith, who was appointed by Antigua's government to liquidate the bank, recently said that Stanford spent the money on jets, villas and a luxurious life-style.

"What I would like is for Allen Stanford to open his sweet mouth and tell us where the money is," said Bertha Kleiman, an investor who lives in Mexico City.

While Stanford faces up to 250 years in prison if convicted on all counts, many of his investors are also considering more spartan living arrangements.

"Every day I am getting messages that people are losing their homes," Shaw said.

(Additional reporting by Anna Driver in Houston. Editing by Jason Szep and Paul Simao)