Financier Stanford pleads not guilty in $7 billion fraud scheme

[JURIST] Billionaire financier Allen Stanford [BBC profile; JURIST news archive] pleaded not guilty Thursday to 21 charges of fraud, conspiracy, and obstruction in the US District Court for the Southern District of Texas [official website] but remained in prison overnight. Prosecutors opposed Stanford's release by filing a memorandum in support of detention [text] Thursday that argues Stanford would pose a flight risk if freed from custody. US Magistrate Judge Frances Stacy stayed [Boston Globe report] Stanford’s release on $500,000 bail until Friday so that federal prosecutors could appeal [Financial Times report].

Stanford was indicted [text, PDF; JURIST report] last week on fraud and obstruction charges related to an alleged $7 billion fraud scheme. Through three of his investment companies, Stanford allegedly violated the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 [texts]. He was charged [complaint, PDF; JURIST report] in February with running a fraudulent investment scheme by selling certificates of deposit on the promise of improbably high interest rates.

 

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.