Convicted Ponzi Schemer Stanford Loses Bid for High Court Review

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By Phyllis Diamond

Nov. 28 — Former Texas tycoon R. Allen Stanford lost his bid to have the U.S. Supreme Court review a federal appeals court decision affirming his conviction for master-minding a decades-long $7 billion Ponzi scheme ( United States v. Stanford, U.S., No. 15-1490, cert denied 11/28/16 ).

He claimed in a petition for high court review that the government violated his Sixth Amendment right to counsel by seizing his assets prior to trial without showing that the assets were tainted. The justices Nov. 28 denied the petition without comment.

Top Firms

According to Stanford, a number of top law firms were willing to defend him, but because of the asset freeze, he was represented by “under-resourced, publicly paid, counsel, rather than counsel of his own choosing.”

Stanford and three Stanford Financial Group executives were charged in 2009 with misleading 30,000 investors in an alleged plot to sell fraudulent certificates of deposit. He was convicted after a six-week trial and sentenced to 110 years in prison, among other consequences.

In October 2015, Stanford failed to convince the U.S. Court of Appeals for the Fifth Circuit that the charges against him were defective or that he was denied a fair trial.

In other high court action, a wealth fund from Kazakhstan failed to gain review of the Second Circuit’s conclusion that the Foreign Sovereign Immunities Act didn’t protect it from claims it misled investors about the value of a subsidiary’s securities ( Sovereign Wealth Fund Samruk-Kazyna JSC v. Atlantica Holdings Inc., U.S., No. 16-201, cert denied 11/28/16 ).

The Second Circuit’s decision created a circuit split on whether a financial loss by a third party in the U.S. constitutes a “direct effect” in the U.S., the fund argued. “Review should be granted to reconcile this conflict.”

Stanford was represented by Wright & Close LLP, Houston. The Kazakhstan wealth fund was represented by Curtis Mallet-Prevost Colt & Mosle LLP.

To contact the reporter on this story: Phyllis Diamond at PDiamond@bna.com

To contact the editor responsible for this story: Seth Stern at sstern@bna.com

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