HOUSTON (Reuters) - Texas financier Allen Stanford used lies and bribes to steal the hard-earned savings of his customers, prosecutors said on Tuesday.
The former billionaire is accused of selling certificates of deposit from his bank in Antigua and using the money to finance his lifestyle, in one of the biggest white collar cases since Bernard Madoff.
“He told them lie, after lie, after lie,” prosecutor Gregg Costa told the jury at the start of Stanford’s trial on criminal fraud charges in federal court in Houston.
Stanford, 61, dressed in a grey suit and white shirt, pleaded not guilty to a 14-count indictment. “I plead not guilty to every count,” the former billionaire said in an emphatic voice.
He rocked in his chair, listening intently as Costa laid out the government’s case of a sprawling $7 billion Ponzi scheme originating with Stanford International Bank in Antigua. Stanford used it as “his own private piggy bank,” Costa said.
“Really, that is the perfect name for the bank, because the bank was there to enrich Mr. Stanford.”
Stanford spent millions of dollars of investor funds on his hobby of cricket, his private airplanes and a company that was formed to take care of his yacht, the Sea Eagle, Costa said.
He bribed his accountant and a regulator in Antigua in an effort to keep U.S. authorities at bay, Costa said.
Robert Scardino, one of Stanford’s lawyers, told the jury that the Texas native was an astute businessman whose business was ruined when the government seized it in 2009.
“Stanford was kind of an absentee CEO, a visionary,” Scardino told jurors.
He argued that every dime investors put into CDs issued from the Antigua bank was repaid over the course of 22 years.
“He paid every penny that was promised,” Scardino said. “Never once failed, no evidence of a fraud.”
Stanford’s businesses and investments were all legitimate until the U.S. Securities and Exchange Commission filed civil charges in February 2009 and seized all of Stanford’s assets, Scardino said.
Witnesses for the prosecution include former employees, financial advisers who allegedly peddled certificates of deposit for the bank and Stanford’s former chief financial officer, James Davis, who is the only co-defendant who has pleaded guilty to the scheme.
Stanford will take the stand to answer any questions the prosecution has and talk about his charitable works on Antigua, Scardino said.
The defense may also call accountants and other financial experts who can attest to the accuracy of the bank’s documents, Scardino said.
Reporting by Anna Driver; Editing by Eddie Evans, Bernard Orr