Stanford Bribes Charged By Feds

The bizarre fraud case of wealthy Texan R. Allen Stanford took a turn yesterday after federal prosecutors pointed a finger at a high-ranking Antiguan financial regulator, who they say accepted bribes from Stanford in exchange for covering up a $7 billion Ponzi scheme.

That revelation came as Stanford, 59, and a cadre of cohorts were indicted in connection with the alleged fraud, which has extended from Stanford's Houston headquarters to the tropical island of Antigua, where Stanford was knighted and is referred to as "Sir Allen."

In addition to Stanford, his former chief investment officer, Laura Pendergest-Holt, 35, was indicted for refusing to cooperate with the Securities and Exchange Commission.

But perhaps the most surprising indictment was that of Leroy King, a 63-year-old former administrator and CEO of Antigua's Financial Services Regulatory Commission, who's been accused of lying to investigators to cover up the fraud as well as accepting bribes. Prosecutors said the bribes came in the form of cash and Super Bowl tickets.

Stanford faced the charges in Richmond, Va., but is expected to stand trail in Houston. Because he is seen as a flight risk, he was ordered detained.

King, Pendergest-Holt and a host of other executives of Stanford's financial firm were also slapped with additional civil charges by the SEC, which first sued Stanford in February. In addition, King was slapped with a civil lawsuit by the SEC.

Stanford Bribes Helped Stall SEC Case, Agency’s Lawsuit Alleges - BL, June 20, 2009

U.S. Securities and Exchange Commission lawyers had tried for at least a year to investigate R. Allen Stanford’s Antiguan bank, now at the center of an alleged international Ponzi scheme, when they sought help from Leroy King, the island nation’s top securities watchdog.
King, chief of Antigua’s Financial Services Regulatory Commission, had been collecting thousands of dollars in bribes from Stanford, the SEC claimed in a lawsuit against him yesterday. In 2006, King met the Texas financier and allegedly outlined a response to keep the U.S. off track: He told the SEC that an on-site examination of Stanford’s firm showed it complied with all “applicable laws and regulations.”
The U.S. regulator’s lawsuit, possibly its first to target a foreign counterpart, may help answer questions from lawmakers and investors about why the agency didn’t shut down Stanford’s offshore bank until February, following years of investigation. It also shows the perils the SEC faces as a growing share of inquiries lead offshore, requiring help from watchdogs abroad. .....
King is a citizen of both the U.S. and of Antigua and Barbuda. An attorney representing King couldn’t be located. A phone number listed in Atlanta, where the SEC says King has a residence, was disconnected.
King was picked to be head of the regulator in June 2002. He holds a graduate degree in finance from Iona College in New York and spent “most” of more than 20 years in the financial industry at Bank of America Corp., according to the Caribbean regulator’s Web site. .....

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