* Government suspects some Stanford clients hid funds
* Seeks John Doe summons, tool used in UBS case
* IRS cites former Stanford employees to bolster request
(Adds investor group comments, update on Janvey lawsuit, IRS
agent interviews with Stanford employees)
By Kim Dixon
WASHINGTON, Dec 2 The U.S. Justice Department
asked a court on Wednesday for permission to seek the names of
American clients of Texas financier Allen Stanford who may be
hiding assets abroad to evade taxes.
U.S. authorities have accused Stanford of masterminding a
$7 billion Ponzi scheme centered on fraudulent certificates of
deposits through his Stanford Group Co. In June, Stanford was
indicted for mail, wire and securities fraud and he remains in
jail awaiting trial.
The government asked the U.S. District Court for the
Northern District of Texas in Dallas to let it serve a
so-called "John Doe summons" on Ralph Janvey, the
court-appointed receiver for Stanford and related entities.
Prosecutors used the same kind of summons to go after giant
Swiss bank UBS AG UBSN.VX and win eventual access to the
names of 4,450 U.S. clients.
The Obama administration has aggressively sought to crack
down on Americans hiding assets overseas from the Internal
George Clarke, a white collar tax attorney in Washington
D.C., said the Justice Department request was another step in
the government's effort to eradicate opportunities for U.S.
taxpayers to hide assets offshore.
"It should be a wake-up call for folks who thought that the
enforcement action against UBS would be a one-hit wonder," he
Janvey was not available for comment. He had previously
sued to recover proceeds from several hundred investors in the
firm's offshore accounts, who redeemed their CDs in the weeks
before civil fraud charges were filed, the firm's assets seized
and customer accounts frozen. An appeals court denied his bid.
Angela Shaw, founder of the Stanford Victims Coalition,
representing some 6,000 Stanford investors, thought it unlikely
the IRS would find wrongdoing, with many Stanford victims
invested using retirement accounts.
"Everyone is just so shocked; it seems ridiculous," said
But in a declaration to the court, IRS agent Daniel Reeves
cited interviews with two unnamed Stanford employees who said
they left over concerns about "improprieties" at the firm,
including failure to report foreign accounts.
The government wants information from Janvey on any U.S.
clients who had accounts through Stanford units from 2002
Most of Stanford's fortune came from Stanford International
Bank, based in Antigua, according to Reeves, which he called
the "Crown Jewel" in his empire. The bank's financial papers
show total deposits of $8 billion in 2008, he said.
Stanford's operations formed and managed trusts,
foundations and international corporations for clients.
Reeves said the IRS' experience with offshore funds has
been that such entities are frequently used to hide
The case is Securities and Exchange Commission v. Stanford
International Bank LTD, U.S. District Court, Northern District
of Texas, No. 9-2290.
(Reporting by Kim Dixon; Additional reporting by Jeremy
Pelofsky and Rachelle Younglai; Editing by Leslie Gevirtz,
Gerald E. McCormick and Tim Dobbyn)
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