A New Orleans federal appellate court has let stand Houston investment promoter R. Allen Stanford’s 2012 fraud conviction and 110-year prison term for masterminding a fraud scheme that caused $1 billion in client losses in Louisiana and $7 billion globally.
A three-judge panel of the 5th U.S. Circuit Court of Appeals rejected Stanford’s claims that his indictment was defective, that the jury received faulty instructions, that the government withheld evidence favorable to him, that the trial judge favored the government and that his sentence was improper.
Stanford, who maintained at his sentencing that he neither ran a Ponzi scheme nor defrauded anyone, complained in his appeal of the use of the term Ponzi scheme at his trial, but the 5th Circuit panel said the term captured the “essence” of his fraud scheme.
The panel said the evidence presented at the seven-week trial was sufficient to convict Stanford. The judges also said his sentence was appropriate.
“The court’s sentence of 110 years fell within the 230-year sentence authorized by the sentencing guidelines and is therefore presumed reasonable,” Circuit Judge Edith Brown Clement wrote Thursday for the appeals court.
Clement was joined by Circuit Judges Fortunato Benavides and Stephen Higginson.
Stanford filed his appeal on his own behalf, without an attorney.
Stanford bilked some 25,000 investors from Baton Rouge to Bolivia, living a lifestyle of luxury and island-hopping. Roughly 1,000 residents of the Baton Rouge, Lafayette and Covington areas lost upward of $1 billion to Stanford’s companies.
A Ponzi scheme includes few, if any, real investments. Victims are led to believe they are investors, but their money is siphoned by Ponzi operators for their own use. Victims receive small periodic payments that they are told are profits, but those payments are a mere fraction of crime targets’ own money.
Ponzi schemes collapse when sufficient numbers of prospective new investors cannot be persuaded to add more money to the pot, and periodic payments stop.
Investors were told by Stanford’s financial advisers that their money was safely held in certificates of deposit at Stanford International Bank in Antigua, a Caribbean island. But the money for the CDs funded Stanford’s lavish habits.