June 14 (Bloomberg) -- R. Allen Stanford, found guilty of leading a $7 billion international fraud scheme by a U.S. jury, will spend the rest of his life in prison if a federal judge grants prosecutors’ request.
Stanford, 62, will be sentenced today by U.S. District Judge David Hittner in Houston. Jurors in March convicted the Stanford Financial Group principal of 13 charges, including five counts of mail fraud and four of wire fraud, each punishable by as long as 20 years in prison.
Prosecutors asked for a 230-year term, the maximum under federal sentencing guidelines. Ali Fazel, one of Stanford’s lawyers, said the defense asked for a sentence of 31 to 44 months, based on a different, much-lower calculation of investors’ losses. Prosecutors contended that such a sentence was tantamount to “time served” for Stanford, who has been in custody since June 2009.
A sentence of about 30 years is more likely, according to Douglas Burns, a New York criminal defense lawyer.
“This isn’t the Madoff case,” Burns said, referring to Bernard Madoff, the New York financier who received a 150-year term for a Ponzi scheme that bilked investors of more than twice as much money as Stanford’s victims. “This doesn’t seem to be at the same level.”
Stanford’s jury found he lied to buyers of certificates of deposit issued by his Antigua-based Stanford International Bank Ltd. and sold in the U.S. by his Houston-based securities firm, Stanford Group Co.
Jurors rejected claims that investors received adequate disclosures of how their money was being spent and that any wrongdoing was the fault of finance chief James Davis, who pleaded guilty to fraud and testified against Stanford.
“Robert Allen Stanford is a ruthless predator responsible for one of the most egregious frauds in history,” the Justice Department said in its 34-page filing on June 6.
Having won a $330 million forfeiture verdict two days after the conviction, prosecutors on June 12 asked Hittner to enter a $5.9 billion money judgment against the financier.
Barry Pollack, Washington criminal defense lawyer, said the government’s recommendation is inappropriate for a symbolic sentence. Stanford would be 77 if he served 15 years and would be unlikely to commit crimes after being released, Pollack said.
“It’s hard to take a request for a 230-year sentence seriously,” Pollack said yesterday in a telephone interview.
Burns, a former federal prosecutor, agreed.
“The government, I think, is not looking for this 230-year sentence,” he said. Given Stanford’s age, “a life sentence approximates 25 years.”
U.S. District Judge Denny Chin was under “unbelievable pressure” when he sentenced Madoff in 2009, Burns said, adding he doubted Hittner would mete out a comparable punishment.
“I don’t think he’s going to give him a Bernie Madoff-like sentence because I don’t think the case is viewed like the Madoff case,” he said. A 12 1/2-year sentence would fairly and severely punish the financier, he said.
Thomas Petters, 54, a Minnesota businessman found guilty of orchestrating a $3.5 billion fraud in Dec. 2009, received a 50-year prison term.
Galleon Group LLC co-founder Raj Rajaratnam last year was sentenced to 11 years for insider trading. He will be 55 tomorrow. Enron Corp. Chief Executive Officer Jeffrey Skilling, found guilty of both fraud and insider trading at the world’s biggest energy trading company, got a 24-year term in 2006. He is now 58.
In sentencing Stanford, Hittner will take into account the amount of money lost, and the impact on his victims. The judge will also consider the financier’s health and whether he expresses remorse for his acts, said Pollack.
“You can express some empathy for the people who lost money without admitting that you intentionally committed a fraud,” preserving the viability of an appeal, he said.
More than 300 victims’ letters have been received by the court. Two fraud victims will address the judge before the financier is punished, according to court papers.
“Madoff may go down in history for operating the world’s biggest Ponzi scheme, but I hope Judge David Hittner gives Allen Stanford the ‘bragging rights’ he deserves for operating the world’s most criminal Ponzi scheme,” victims advocate Angela Shaw said in an e-mailed statement. “His actions have ruined thousands of lives, for which he has shown no remorse.”
The case is U.S. v. Stanford, 09cr342, U.S. District Court for the Southern District of Texas (Houston).
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