Allen Stanford, Texas Billionaire Arrested

According to reports, Texas billionaire Allen Stanford was taken into custody on June 18 on a fraud-related charge in Stafford, Virginia, the FBI says.

Stanford, accused of a $9.2 billion fraud by U.S. regulators, denied all wrongdoing in a tearful interview in April during which he threatened to punch his questioner in the mouth.

“I would die and go to hell if it’s a Ponzi scheme,” Stanford, who was ranked at No. 205 in Forbes magazine’s list of 400 richest Americans with assets of more than $2 billion, told ABC News.

The assets of Stanford and his financial groups, based in Antigua and the Caribbean, are frozen while the U.S. Securities and Exchange Commission investigates allegations he ran “a massive Ponzi scheme,” a pyramid scheme in which new investors’ money is stolen to pay profits to existing clients.

The SEC has said that Stanford was behind “a fraud of shocking magnitude.” FBI agents served Stanford with SEC papers accusing him and three of his companies of orchestrating a $9.2 billion investment fraud scheme. With the filing, the IRS joins thousands of other creditors in the case who are seeking a crack at Stanford’s remaining assets.

In a complaint filed in February in federal court in Dallas, Texas, the SEC accused Stanford International Bank of using a network of financial advisers to sell about $8 billion of “certificates of deposit” to investors.

The bank boasted it had a unique investment strategy that had allowed it to reap double-digit returns on its investments for the previous 15 years, the SEC says.

 

The civil complaint alleged an additional scheme relating to $1.2 billion in sales.