Prosecutors go after Stanford 'Baby Mama' fund
US: A "Baby Mama Trust" set up by financier Allen Stanford as US
regulators closed in on his $7 billion Ponzi scheme is among the $300
million in assets US prosecutors hoped to recover at a forfeiture
hearing Wednesday.
The flamboyant Texan was convicted of 13 fraud, money laundering,
conspiracy and obstruction of justice charges Tuesday. The same jury is
tasked with determining what assets he should forfeit in order to begin
repaying his victims.
Postal inspector Clayton Gerber described to jurors how the
government tracked down 29 Stanford accounts funded by money stolen from
30,000 investors from more than 100 countries who were tricked by bogus
investments with Stanford International Bank.
Following Gerber's testimony, prosecutor Andrew Warren reminded
jurors: "This money may have changed hands and forms, from cash to real
estate and back to cash again, but proceeds remain proceeds.
"All that matters is that the money in these accounts is directly
traceable to CD depositor funds from Stanford International Bank."
"That's the Baby Mama Trust," Gerber said as prosecutors pointed to a
colored graph illustrating the flow of funds among various Stanford
accounts.
"It was funded by a transfer of money from the sale of 38 Grand Bay
Estates in Key Biscayne, Florida." Rebecca Reeves-Stanford, the mother
of Stanford's children, is the only signatory to the documents used to
set up the Baby Mama Trust, and is the one who transferred the funds out
of the trust into two annuities.
Prosecutors did not specifically say who set up the Baby Mama Trust.
"There's nothing wrong with having money in the Cook Islands,"
countered defense attorney Ali Fazel, referencing the location of the
Baby Mama Trust.
"They (the prosecutors) want you to assume that all the money in
these accounts is CD money; don't do it." While Stanford bought the
house for his Rebecca Reeves-Stanford and their two children in August
2005, Gerber said he was able to trace the funds used to buy the house
directly back to investors who bought the bogus investments. As a
result, the proceeds of the sale -- which occurred several months after
federal investigators announced charges against Stanford in February
2009 -- belong to the bilked investors, Gerber testified.
Prosecutors said Stanford stole $2 billion from investors to fund his
lavish lifestyle.
Investigators could not find 92 percent of the $8 billion the
Antigua-based Stanford International Bank said it had in assets and cash
reserves.
A dual citizen of the United States and the Caribbean country of
Antigua and Barbuda, Stanford was known for his largesse, especially on
the two paradise islands. AFP |