22 Jun 2009

Billionaire may spend life behind bars

9:59 am on 22 June 2009

Texan billionaire Allen Stanford could spend the rest of his life in prison after being charged with swindling investors of $US7 billion.

Prosecutors argue Sir Allen ran an elaborate ponzi scheme, in which supposed profits are paid to early investors from money actually invested by later participants through his bank on the Caribbean island of Antigua.

Assistant Attorney-General Lanny Breuer says Sir Allen, along with six others, deceived investors, fabricated financial statements and tried to hide their fraud.

Sir Allen has been remanded in custody pending a full detention hearing to be held in Texas.

If convicted on all charges, the financier could face up to 250 years in prison.

He has proclaimed his innocence through his lawyer.

He already faces civil charges over an alleged fraud totalling $US8 billion - charges he denies.

The key to the government's case could be help from sir Allen's former finance chief and former college roommate, James Davis, who is co-operating with investigators.

Analysts say there is likely to be little cheer for investors, whatever the outcome.

Prosecutors say barely $US2 billion in recoverable assets has been identified out of the $US7 billion taken from investors.