HOUSTON (AP) — Texas tycoon R. Allen Stanford flushed away billions of investor funds on a "lavish lifestyle and his loser companies" as part of a massive Ponzi scheme that spanned two decades, a prosecutor told jurors Wednesday.
During closing arguments in Stanford's fraud trial, prosecutor William Stellmach said Stanford lined his pockets "with billions of dollars of other people's money."
Stellmach told jurors that Stanford, 61, for years lied to investors who bought certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua, telling them it was a safe investment.
Using a PowerPoint presentation, Stellmach said depositors were lied to about how their funds were invested, and were never told they paid for a string of the financier's failed businesses that Stellmach described as "money pits" that lost millions. Nor were investors told their money funded his extravagant lifestyle, which included yachts and private jets.
"The bank was his own personal ATM," Stellmach said.
Stellmach said that by 2008, the bank owed depositors over $7 billion that it did not have and Stanford was responsible for the massive debt.
"Mr. Stanford had been digging that hole for years with his lavish lifestyle and his loser companies," he said.
The prosecutor said Stanford covered up the massive fraud by falsely telling depositors their money was protected by an insurance policy and that the bank had been given a clean bill of financial health through reviews from an outside auditor and Antiguan regulators. Stellmach told jurors that both the auditor and regulators were bribed with millions from a secret Swiss bank account.
"A real audit would have discovered this fraud in about five minutes," he said.
Stanford's attorneys were set to make their closing arguments to jurors later Wednesday.
Stanford, who has been jailed without bond since being indicted in 2009, is on trial for 14 counts, including mail and wire fraud. He could be sentenced to more than 20 years in prison if convicted. The financier's trial began Jan. 23.
Over a three-week period, federal prosecutors methodically presented evidence — including testimony from ex-workers of Stanford's companies as well as emails, financial statements and other documents— that they say shows the flamboyant businessman orchestrated a 20-year scheme that bilked more than $7 billion from investors.
The prosecution's star witness, James M. Davis, the ex-chief financial officer of Stanford's companies, told jurors he and Stanford faked the bank's profits and used CD deposits to bribe an outside auditor and Antiguan bank regulators to help them hide the alleged fraud.
Defense attorneys tried to show Stanford was a savvy businessman whose business empire, headquartered in Houston, was legitimate. They blamed Davis for the alleged fraud. They said Stanford was trying to consolidate his businesses to pay back investors when authorities seized his companies.
Defense witnesses told jurors Stanford was not a hands-on boss and that Davis handled the day-to-day operations of his businesses.
Stanford's attorneys, who spent about nine days presenting their case, did not put the businessman on the witness stand. Stanford had apparently wanted to testify but was convinced not to do so. Legal experts say it's usually better for a defendant not to testify.
Stanford was once considered among the wealthiest people in the U.S. with an estimated net worth of more than $2 billion. But at his trial, he had court-appointed attorneys because his assets have been seized by authorities.
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