Securities brokerage executive charged with fraud

On Behalf of Sanchez Burke, LLC

Recently, a former executive for Stanford Group Co. reported that the securities brokerage firm, recently closed by U.S. regulators, had lost a minimum of $20 million before it was shut down. The former executive reported the figure during cross-examination on the fifth day of the investor fraud trial. And while the company alleges that everyone was able to withdraw their money until the Securities and Exchange Commission sued, the executive reported that at least one client — who has a home in Lafayette, Louisiana — was denied his right to $20 million.

R. Allen Stanford was indicted in 2009. The 61-year-old man is facing accusations that he led an investment fraud scheme, centered on CDs, that amounted to $7 billion. He’s been charged with obstruction of an SEC probe, mail fraud and wire fraud. To date, Stanford continues to deny the charges.

The allegations he faces could result in substantial prison time. A Bloomberg news report confirmed that Stanford suffered a jailhouse beating shortly after his arrest. After he began rubbing his head during court proceedings, the judge allowed him to watch the trial from another room.

According to the former executive, the Louisiana client had entrusted Stanford’s company with nearly $50 million prior to making the withdrawal. He made the $20 million withdrawal shortly before Stanford closed that option to all clientele. If Stanford is convicted of the charges against him, he could be facing serious penalties, which could include jail time.

Federal and state authorities take fraud and other white collar crimes very seriously. Because of this, it is very important to seek legal advice if you suspect you are being investigated for such a crime. Knowing your rights and options could go a long way toward protecting your freedom.

Source: Bloomberg, “One Stanford Client Lost $20 Million Ex-Executive Tells Jurors at Trial,” Andrew Harris, Jan. 27, 2012

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