TEXAS – The jury hearing the case of disgraced Texas financier Allen Stanford is due to return to court today after Federal District Judge David Hittner halted the criminal trial early on Tuesday after the accused became ill.
The judge did not specify the nature of Stanford’s illness.
Stanford is facing charges that he masterminded a massive US$7 billion Ponzi scheme involving certificates of deposit (CDs) at his Antigua-based Stanford International Bank (SIB).
Just before the case was adjourned on Tuesday, Larry Campagna, a tax lawyer, testified in Stanford’s defence, said US Internal Revenue Service (IRS) auditors knew of the hundreds of millions of dollars the financier borrowed from the SIB to fund an array of private ventures.
“In 1999, the IRS position was these were valid loans and should be treated as valid loans” between the bank and Stanford and between Stanford and his other companies, Campagna said.
Campagna told the court that IRS auditors were already in Stanford’s offices examining his personal and corporate tax returns when his company was hired to appeal some IRS rulings in 2003.
He said the auditors were not necessarily given “free rein” to look at any documents they wanted.
“Nobody at the IRS has unlimited access to anything,” said Campagna, adding that the IRS did not seek fraud penalties on any of the Stanford returns auditors examined for the years 1999 through 2003.
He disclosed that his company was still negotiating with the IRS over subsequent returns when Stanford businesses were seized by the US Security and Exchange Commission (SEC).
US prosecutors claim Stanford, 61, secretly borrowed two billion US dollars from investor savings at the SIB to finance his lavish lifestyle and speculative ventures, ranging from Caribbean airlines, real estate developments and cricket tournaments.
Prosecutors also claim that CD buyers were told their funds were held in “safe, liquid investment”
Genealogical researcher Karen Pittman, a college librarian Stanford paid to investigate his ancestry for links to Stanford University founder Leeland Stanford, also testified on Tuesday.
Prosecutors claim that Stanford often touted “blood ties” with Leeland Stanford, in promotional materials given to investors, and that the university had denied any linkage with the Texas financier.
But Pitman said she found evidence she felt indicated the two men shared a common ancestor in England during the 1600s.
However, under cross examination by prosecutors, she said that, after two years of research, she could not state “definitively” that the two Stanfords were related. (CMC)
