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Allen Stanford Convicted in $7B Ponzi Scheme

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By Andrew Chow, Esq. on March 06, 2012 1:51 PM

Texas tycoon R. Allen Stanford was convicted Tuesday of running a $7 billion Ponzi scheme -- the biggest investment fraud since the Bernie Madoff scandal.

A jury found Stanford, 61, guilty on 13 of 14 criminal charges, including fraud, conspiracy, and obstructing an investigation by the Securities and Exchange Commission, Reuters reports. Jurors acquitted Stanford on a single wire-fraud charge.

"For all the investors, I think there is a sense of relief that they weren't just fools," one of Stanford's victims told Reuters. "We were just conned."

R. Allen Stanford was arrested in 2009 and accused of running a $7 billion Ponzi scheme that defrauded nearly 30,000 investors in more than 100 countries, The New York Times reports.

Stanford's conviction involved use of a bank -- the Stanford International Bank, which he set up on the Caribbean island of Antigua, according to Reuters. Stanford put investors' money into the bank, then used the bank as his "personal ATM," prosecutors said.

The money bankrolled Stanford's lavish lifestyle. He spent millions on pricey real estate for family and friends, and bought expensive clothes, luxury homes, and a yacht for himself, Reuters reports.

At one point, Stanford's personal fortune was valued at $2.2 billion. Most of Stanford's victims, however, never got anything in return for their investments, Reuters reports.

R. Allen Stanford's conviction could result in a 20-year prison sentence for the most serious charges, the AP reports -- but he could be in prison much longer, if a judge orders his sentences to be served consecutively. One of Stanford's lawyers says his client plans to appeal.

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