Texas financier Allen Stanford drew on a secret Swiss bank account to pay bribes to the banking regulator in Antigua and Barbuda, the prosecution’s top witness said at Stanford’s criminal fraud trial on Friday.
The 61-year-old Stanford is charged with using his Houston-based financial empire to swindle investors out of more than $7 billion. He has pleaded not guilty to a 14-count indictment.
At the heart of Stanford’s alleged fraud are certificates of deposit sold by his Antigua-based Stanford International Bank Ltd to about 28,000 investors.
Prosecutors allege that Stanford diverted $2 billion from customer deposits to fund a luxurious lifestyle and money-losing ventures such as airlines, real estate developments and cricket tournaments in the Caribbean.
“The monies flowed from Stanford International Bank CDs to this slush account. It was a slush fund, just used for whatever the holder wanted to use it for,” James Davis, Stanford Financial Group’s former chief financial officer, told the jury in US Federal Court in Houston. “One purpose was to pull cash out to bribe the regulator in Antigua, Mr Leroy King.”
King, former head of Antigua and Barbuda’s Financial Services Regulatory Commission and one of four people charged in a separate indictment, is accused of taking bribes to divert regulatory attention from Stanford’s operations, and is fighting extradition from Antigua.
Davis told jurors Stanford gave King at least $10,000 to $15,000 in cash every quarter, as well as tickets to the National Football League Super Bowl championship games in 2005 and 2009, to prevent government examiners from probing the bank’s investment portfolio.
Davis said that for years he supplied inflated totals for the bank’s investment accounts to Antiguan regulators to disguise the gap between the bank’s actual assets and its reported assets.
In June 2005, Davis said King gave Stanford a copy of a confidential letter from the US Securities and Exchange Commission (SEC), asking Antiguan banking authorities for help investigating Stanford’s bank for possible fraud. Davis said Stanford and a company lawyer drafted King’s reply to the SEC, which falsely assured US regulators that Stanford’s bank was clean.
by Caribbean News Now
