SEC files new charges against Stanford officials

HOUSTON (Reuters) - Two accountants at Stanford International Bank and an Antiguan financial regulator helped Texas billionaire Allen Stanford carry out a "massive Ponzi scheme" for more than a decade, U.S. regulators said in a court document on Friday.

Stanford will appear in federal court in Virginia on Friday to answer allegations he orchestrated a massive fraud through his Antigua bank that bilked investors out of billions of dollars.

The new civil complaint, filed by the SEC in federal court in Dallas against Stanford and top company officials, gives new insight into how the SEC says Stanford carried out his alleged fraud.

The accountants, Gilberto Lopez and Mark Kuhrt, "reverse-engineered" the Antigua bank's financial statements to report nonexistent income, the SEC said.

Leroy King, chief executive officer of Antigua's Financial Services Regulatory Commission, ensured that the watchdog agency "looked the other way" and conducted sham audits of the bank's books.

In exchange, King got bribes from Stanford in the form of money, free use of Stanford's private jets, a corporate car and tickets to the 2004 Super Bowl in Houston, the SEC said.

The SEC said all the falsified bank statements were prepared, drafted, and approved by Stanford and two top executives - bank chief investment officer Laura Pendergest-Holt and James Davis, the company's chief financial officer who was also Stanford's one-time roommate at Baylor University.

Stanford and Davis both signed the falsified statements, the SEC said.

Stanford, Davis and Pendergest-Holt have previously denied wrongdoing.

By the end of 2008, Stanford had misappropriated more than $1.6 billion from the bank, concealed in some cases as personal loans to Stanford, the SEC said.

Stanford used some of the money to fund his "personal playground," the SEC said. That included more than $400 million in personal real estate deals including the Sticky Wicket Restaurant in Antigua, and more than $36 million to subsidize a cricket tournament that boasted a $20 million prize purse, it said.

Davis, Lopez and Kuhrt developed an elaborate system to conceal the Antigua bank's actual returns, which included keeping back-up files on a portable hard drive which they called "the football," the SEC said.

Stanford's fleet of six private jets was also used to fly the Antigua bank's paper documents to Antigua, where they were burned, the SEC said.

Effort to reach attorneys for Lopez, Kuhrt and Davis were not immediately successful.

(Additional reporting by Anna Driver, editing by Vicki Allen)