
(Barrons) - A new bill has come due for R. Allen Stanford, architect of a $7 billion Ponzi scheme, who is already well into serving what is effectively a life sentence for his crimes.
A federal judge this week ordered an end to the government’s litigation against Stanford, whose scheme drew in some 18,000 investors, ordering him to pay a $5.9 billion civil fine. Charges were first filed in 2009 after the financial crisis revealed several long-running financial schemes, including that of Bernie Madoff.
Judge David Godbey also levied financial penalties on two of Stanford’s associates. James Davis, who had been the chief financial officer at Stanford Financial Group, was ordered to pay nearly $17.7 million in disgorgement and a civil penalty. Gilberto Lopez, formerly Stanford’s chief accounting officer, was ordered to pay just over $3.4 million for his role in the fraud.
The judgments bring an end to the Securities and Exchange Commission’s long-running civil case against the former financier, whose extensive fraud came to light shortly after Bernie Madoff’s. Godbey wrote that there was “no just reason for delay” in concluding the case.
The SEC brought its charges against Stanford in February 2009, alleging that he had sold billions of dollars of certificates of deposit promising lofty interest rates through a bank he controlled in Antigua.
Those CDs turned out to be essentially worthless, and Stanford’s enterprise unraveled. Had it not been for Madoff, Stanford might have been the most famous swindler of the financial-crisis era.
Stanford, now age 74, is serving a 110-year prison sentence.
In 2013, Davis was sentenced to five years in prison for his role in the fraud. Lopez was sentenced to 20 years in prison in a separate trial that same year.
The SEC declined to comment on the judgment. Lawyers for Stanford, Davis, and Lopez didn’t immediately respond to requests for comment.
The SEC ordered Stanford to pay the $5.9 billion fine within 30 days, but Stanford, who has been in prison since his arrest in 2009, was declared indigent by a court prior to his sentencing, rendering it unlikely any of those billions will be forthcoming.
By Kenneth Corbin
January 31, 2025