Stanford's defence: only 'bogus' fraud charges blocked my cricket masterplan
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Wednesday 25 January 2012
Allen Stanford's dream of turning Twenty20 cricket into a multibillion dollar industry was just one of a string of Caribbean business ventures that would have reaped huge profits for his investors – if only the US government hadn't moved in with bogus fraud charges against him.
That was the central claim of the Texan playboy's defence last night, as his long-awaited trial got underway in Houston and his lawyers came out swinging against a "haphazard and sloppy" prosecution that has left their client a broken man.
Mr Stanford, who once generated headlines with his extensive philandering and bombastic sponsorship of international cricket, rose in court to declare, in a booming Texan drawl: "I plead not guilty to every count."
Prosecutors alleged that the financier told "lie after lie after lie" to investors across the Americas who put money into his Antiguan bank, but his defence attorney, Robert Scardino, said Stanford International Bank was no pyramid scheme. It had always been able to pay back investors and was sitting on extremely valuable property developments and promising new business ventures when US regulators moved against it in 2009, he said.
"He invested tens millions dollars in cricket like other visionaries invested in [American] football" in the early days of the National Football League in the US, Mr Scardino said.
As opening arguments unfolded yesterday, it became clear that both sides intend to make Mr Stanford's sponsorship of Twenty20 cricket a major focus of the trial. The England and Wales Cricket Board's acceptance, in 2008, of a $100m deal with the financier was immediately controversial because of the unprecedented scale of the prize money, but now a court will decide if the promised cash was in fact stolen from thousands of unsuspecting investors.
"Some people trusted Mr Stanford with their entire life savings, based on his promises to make safe, conservative, low-risk investments," said assistant US attorney Gregg Costa, the lead prosecutor. "He told them lie after lie after lie. He stole from them so he could live the lavish lifestyle of a billionaire and he bribed the people whose job it was to detect such a scheme."
More than $7bn of other people's savings, Mr Costa said, were used as Mr Stanford's "personal piggy bank" to fund private airlines, yachts and "his own personal hobby of funding cricket matches with million-dollar prizes".
But while Mr Costa told the jury they would need only "elementary school math" to see that the value of the bank's assets were being faked, Mr Scardino promised a long, hard trial focusing on the intricacies of international accounting and the regulation of marketing materials for offshore investments. Every one of Mr Stanford's investments was "legitimate and potentially very profitable," he said.
The defence lawyer also attacked Mr Stanford's treatment at the hands of the government and regulators at the Securities and Exchange Commission.
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