UPDATE 1-Stanford clients in Venezuela sue Willis Group

* Willis faces several lawsuits by Latin America clients

* Accused of being “willing” participant in Stanford fraud

* Willis says to defend against claims, holding investigation (Adds comment from Willis Group spokesman)

NEW YORK, Aug 7 (Reuters) - A group of Venezuelan clients of Stanford Financial Group have sued the insurance broker Willis Group Holdings Ltd WSH.N, accusing it of contributing to a $7 billion Ponzi scheme at the Texas-based investment company founded by Allen Stanford.

The lawsuit filed in federal court in Dallas seeks class-action status on behalf of more than 1,200 depositors, and the recovery about $1.6 billion of actual and punitive damages from Willis.

It follows a similar lawsuit last month in the same court by the same law firms seeking $1 billion of damages on behalf of Mexican clients of Stanford. Another Venezuelan investor filed a similar lawsuit in July in Miami federal court.

A Willis spokesman reiterated the company’s previous comment on the Stanford lawsuits, saying, “the company will defend itself vigorously in these lawsuits.”

In the emailed statement, Willis said it did not suspect any of its workers knew of fraud at Stanford and it was “undertaking a full investigation of the facts”.

According to Thursday’s 49-page lawsuit, Willis agreed to Stanford’s request to provide “safety and soundness” letters, and that “the clear intention” was for the letters to be used in Stanford’s marketing to help retain and attract clients.

As a result, the lawsuit said, “Willis “crossed the line from being mere insurance brokers for the Stanford Financial group, to joining the Stanford Financial/Stanford International Bank sales force.” It said this made Willis a “willing” participant in Stanford’s fraud.

Allen Stanford, who reached billionaire status, faces criminal and civil charges related to what U.S. prosecutors have called a $7-billion fraud involving high-yielding certificates of deposit issued by his bank in Antigua.

Many of Stanford’s customers lived in Latin America. A court-appointed receiver took control of Stanford Financial in February. Willis is based in London and domiciled in Bermuda.

The latest case is Canabal v. Willis of Colorado et al, U.S. District Court, Northern District of Texas (Dallas), No. 09-01474. (Reporting by Jonathan Stempel with additional reporting by Ajay Kamalakaran in Bangalore; Editing by Toni Reinhold and Valerie Lee)