June 15 (Bloomberg) -- R. Allen Stanford was sentenced to 110 years in prison for leading a $7 billion international fraud on investors whom one prosecutor said the defendant treated like “road kill.”
U.S. District Judge David Hittner in Houston imposed the sentence yesterday, after saying Stanford had been found guilty of “one of the most egregious criminal frauds ever presented to a jury in federal court.” He ordered Stanford to forfeit $5.9 billion. Jurors in March convicted the Stanford Financial Group principal of 13 charges, including five counts of mail fraud and four of wire fraud.
The jury found Stanford, 62, lied to those who bought certificates of deposit issued by his Antigua-based Stanford International Bank Ltd. and sold in the U.S. by his Houston-based securities firm. Prosecutors said Stanford wasted investor money on failing businesses, yachts and cricket tournaments and secretly borrowed as much as $2 billion from his bank.
“From beginning to end, he’s treated his victims like road kill,” Assistant U.S. Attorney William Stellmach told the judge yesterday before a courtroom packed with some of those victims. “Allen Stanford doesn’t deserve anyone’s sympathy, and he doesn’t deserve your honor’s mercy.”
Stanford had no visible reaction to the sentence. Maintaining a fixed gaze at the judge, he didn’t look back at his mother, Sammie, or daughter Randi, who were among the 200 attendees.
Stanford’s attorneys said the conviction and sentence will be appealed.
“We’re very disappointed in the outcome,” said Ali Fazel, a Stanford lawyer. “It’s a harsh punishment, and it’s tough on him. He is upset because he feels like he didn’t do anything.”
Stanford, whose sentence is 40 years shorter than the prison term meted out to Bernard Madoff in 2009, defended himself to the end.
“I’ve been called a lot of things -- arrogant, abrasive, a son of a gun, difficult, very opinionated and strong-willed. But I am not a thief,” Stanford, dressed in green prison garb, told the judge during a 30-minute address. “I never planned to, never did, either corporately or personally, defraud anyone and never set out to do that.”
Stanford told the court, “I worked my butt off for 30 years to build this company,” adding later, “If we’d been allowed, we could have liquidated every single asset and paid off every single depositor liability and every single depositor and still had significant and substantial assets remaining.”
Stellmach, the prosecutor, disagreed.
“Stanford is proclaiming himself a scapegoat,” Stellmach said. “According to him, he’s the only true victim in this case. That shows the depth of his deceit and lack of remorse that have been his trademark. That’s obscene.”
Prosecutors asked for a 230-year term, the maximum under federal sentencing guidelines. Fazel requested a 10-year term for his client.
“Thirty years and 110 years are effectively the same sentence,” Doug Burns, a former prosecutor, said in an interview yesterday. “The judge obviously felt a very high sentence was necessary.”
“A triple-digit, eye-popping sentence might make for good headlines but it does not make any sense whatsoever in terms of sound sentencing policies,” Barry Pollack, a Washington-based criminal defense attorney, said in a phone interview yesterday.
Neither Pollack nor Burns was involved in the Stanford case.
“It’s Monopoly money. It’s not a real number,” Pollack said, adding that symbolic sentences can actually undermine the integrity of the sentencing process.
“I would much rather see sentences that are crafted to fit the actual facts and circumstances of the individual case than to use sentencing as a mouthpiece to voice public anger,” he said.
Sammie Stanford, 82, said after the hearing that she was prepared for her son to get a long prison sentence.
“In view of everything else that’s happened, I didn’t expect anything different,” she said.
Stanford, who was ranked 205 on Forbes magazine’s 2008 list of the richest Americans, with a net worth of $2.2 billion, has been jailed since being indicted in June 2009 after prosecutors said he might try to flee.
Jurors rejected defense claims that investors received adequate disclosures of how their money was being spent and that any wrongdoing was the fault of Stanford’s finance chief, James Davis, who pleaded guilty to fraud and testified for the prosecution.
Saying he had read every one of the 350 letters received from victims, the judge said, “Stanford ruined the lives of thousands of victims all over the world who entrusted him with their life savings.”
One of the victims, Angela Shaw Kogutt, referred to an honorary knighthood conferred upon Stanford by the Antiguan government and later rescinded.
“He treated our savings like they were Monopoly money,” she told the judge. “Make sure the knight never sees the light of day again.”
The case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston).
To contact the editor responsible for this story: Michael Hytha at email@example.com.