Obama chooses lawmaker accused of corrupt ties with Chavez to attend funeral

Obama chooses lawmaker accused of corrupt ties with Chavez to attend funeral
By Julian Pecquet - 03/07/13 06:43 PM ET


President Obama is sending a lawmaker whose relationship with Hugo Chavez has come under scrutiny in the past to represent the United States at the Venezuelan strongman's funeral on Friday.

Rep. Greg Meeks (D-N.Y.) allegedly met with Chavez in 2006 at the bequest of one of his donors, indicted Ponzi schemer Allen Stanford, to request a criminal probe into a Venezuelan banker who had fallen out with Stanford, The Miami Herald reported in 2009. The banker, Gonzalo Tirado, was charged with tax evasion and theft a year after the meeting with Meeks.


Meeks said at the time that the trip was aimed at thanking Chavez for providing heating oil for poor Americans through Citgo, a subsidiary of the state-owned Petroleos de Venezuela. Citgo is the primary donor of heating oil to Citizens Energy, a nonprofit organization led by former Rep. Joseph Kennedy (D-Mass.) that provides discounted heating oil to poor families.

“I am honored to be a part of a delegation that will represent the United States at the Funeral of Venezuelan President Hugo Chavez on Friday, March 8,” Meeks said in a statement Thursday. “My deepest sympathies go out to the family of President Chavez and the people of Venezuela. Venezuela is an important nation to the Western Hemisphere. I remain committed to building the relationship between our nations. As always, I stand in continued support of the Venezuelan people especially at this time of mourning.”

His office did not respond to a query about his ties to Chavez.

Stanford's lawyer, Kent Schaffer, acknowledged at the time that his client had talked with Meeks about Tirado -- but denied anything improper happened, The New York Post reported.

"I know from my conversation with Allen Stanford that there's no reason to believe that anything illegal or unethical was asked of the congressman," he said.

"They were having problems with an employee they believed was stealing from the bank . . . and he simply was reporting what had happened. I'm not aware of him making any request for anything in particular."

The good-government group CREW has long accused Meeks of corruption.

“It’s one thing to accept gifts of real estate and cash. It’s a whole new level to reach out to dictators on behalf of any donor – the fact that it was Allen Stanford just makes it creepier,” CREW Executive Director Melanie Sloan said at the time the allegations first came to light. “It seems there is nothing Rep. Meeks won’t do for cash. He needs to be held accountable for his actions.”

Former Rep. Bill Delahunt (D-Mass.) will also attend Chavez's funeral, the State Department said. Delahunt met with Chavez in 2005 to strike a deal for discounted winter home heating oil for low-income Massachusetts residents, earning him accusations that he was coddling up to an anti-American dictator.

Chavez died of cancer at a Cuban hospital on Tuesday. Vice President Nicolas Maduro said he had been poisoned and expelled two American officials for allegedly plotting to overthrow the government.

State Department spokeswoman Victoria Nuland denied those accusations on Thursday.

“This is part of a tired playbook of alleging foreign interference as a political football in internal Venezuelan politics,” Nuland said. “And if we're going to get to a place that we can do better together, this kind of stuff has to stop.”

James Derham, the charge d'affaires at the U.S. embassy in Caracas, will represent the State Department at the funeral. Maduro said Thursday that Chavez's body will be permanently displayed in a special tomb.

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Stanford Investors Sue Antigua, Caribbean Central Bank

By Laurel Brubaker Calkins - Feb 18, 2013 8:39 PM GMT+0100
R. Allen Stanford’s receiver and investors’ committee sued Antigua, the Eastern Caribbean Central Bank and 23 former Stanford Financial Group Co. executives over allegations they aided the financier’s $7 billion fraud.

The Official Stanford Investors Committee seeks repayment of at least $90 million in documented loans Stanford made to the dual-island nation of Antigua and Barbuda and accuses its elected officials of having been “Stanford’s partners in crime.” The nation’s leaders shielded Stanford’s scheme and traded choice real estate for as much as $230 million in loans that haven’t been repaid, according to the lawsuit.

“Antigua knowingly provided necessary assistance to Stanford’s $7 billion Ponzi scheme and, in exchange, received millions of dollars in loans whose repayment terms Stanford did not enforce,’’ the committee said in a complaint filed in Dallas federal court on Feb. 15. “For well over a decade, Antigua was a prime participant in, and beneficiary of, the Stanford Ponzi scheme, and actively protected and shielded Stanford’s criminal enterprise from real regulatory scrutiny.’’

Stanford, 62, was convicted in March of masterminding a Ponzi scheme that defrauded investors through the sale of bogus certificates of deposit at his Antigua-based Stanford International Bank Ltd. He is serving a 110-year sentence in a Florida federal prison as he appeals his verdict and sentence.

Falsified Audits
Evidence at Stanford’s trial showed he bribed Antiguan banking regulator Leroy King to falsify audits certifying the bank’s investment returns and mislead U.S. securities regulators investigating the former Texas billionaire’s operations. Stanford was also allowed to underwrite and participate in banking reform legislation that Antigua claimed had cleaned up its corrupt offshore banking industry, according to trial evidence. Antigua has so far failed to extradite King to face criminal charges in the U.S.

The investors on Feb. 15 separately sued the Eastern Caribbean Central Bank, which nationalized Stanford’s other island financial institution, the Bank of Antigua, after the U.S. Securities and Exchange Commission seized Stanford’s enterprise on suspicion of fraud in February 2009.

The ECCB in turn parceled out ownership in the bank to the government of Antigua and to other Caribbean banks in what the investors called “a second act of brazen thievery.” The head of ECCB’s monetary council at the time was Antiguan Minister of Finance Errol Cort, who was both King’s supervisor and one of Stanford’s personal attorneys, according to court papers.


‘Rightful Owners’
“The considerable value of the Bank of Antigua, believed to be in the tens or hundreds of millions of dollars, should be distributed as compensation to its rightful owners, Stanford’s victims and creditors,’’ the committee said in court papers.

Recent comments by Antiguan elected officials indicate the country intends to repay the bank instead of the defrauded investors, Peter D. Morgenstern, a lawyer for the investors’ committee, wrote, meaning that “in essence, Antigua intends to use CD investors’ money to pay itself.’’

Tom Bayko, Antigua’s attorney, didn’t immediately respond to voice or e-mail messages seeking comment on the lawsuit. In an earlier suit, Bayko said Antigua was protected from such litigation by foreign sovereign immunity.

Officials at the ECCB didn’t immediately return telephone or e-mail messages seeking comment on the lawsuit.

Ralph Janvey, Stanford’s court-appointed receiver, filed another lawsuit on Feb. 15 claiming breach of fiduciary duty lawsuit by 23 former directors and officers of Stanford’s operations, including three executives convicted of furthering the fraud scheme. The suit seeks return of all compensation from these individuals, some of whom have been previously sued by the receiver on similar claims.

“Many directors and officers simply looked the other way, while others actively assisted Stanford in defrauding thousands of people out of billions of dollars,’’ Kevin Sadler, Janvey’s lead lawyer, said in the filing in Dallas federal court. They “put their continued employment and substantial compensation ahead of the best interests of the entities they were hired to serve,” he said.

The cases are The Official Stanford Investors Committee v. Antigua and Barbuda, 3:13-cv-0760; The Official Stanford Investors Committee v. Bank of Antigua, 3:13-cv-0762; Janvey v. Alvarado, 3:13-cv-0775. All are in U.S. District Court, Northern District of Texas (Dallas).

The main criminal case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston).


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Ex-Stanford Executives Get 20-Year Sentences

February 14, 2013
By DEBBIE CAI

Two former Stanford Financial Group executives were each sentenced to 20 years in prison for aiding convicted financier Robert Allen Stanford in perpetuating a massive Ponzi scheme, the Department of Justice said.

Gilbert T. Lopez Jr., former chief accounting officer of Stanford Financial Group Co., and Mark J. Kuhrt, former global controller of Stanford Financial Group Global Management, were convicted by a Houston federal jury in November of last year.

The men, both from Houston, were convicted of one count of conspiracy to commit wire fraud and nine counts of wire fraud, the DOJ said.

Judge David Hittner of the Southern District of Texas, who presided over the trial, sentenced Mr. Lopez and Mr. Kuhrt to serve three years of supervised release and ordered Mr. Lopez to pay a $25,000 fine, along with the prison terms. He also found that both men committed perjury at trial.

Evidence presented at the trial showed that Mr. Lopez and Mr. Kuhrt were aware of and tracked Stanford's misuse of Stanford International Bank's assets, kept the misuse hidden from the public and from almost all of Stanford's other employees, and worked behind the scenes to prevent the misuse from being discovered, the DOJ said.

Jack Zimmermann, lead counsel for Mr. Lopez, told Dow Jones Newswires that he is "very disappointed." The sentence was expected to be closer to that of James Davis, former finance chief of Stanford Financial who last month was given five years in jail for his role in the scheme. Mr. Zimmermann described Mr. Davis as the architect of the fraud. He plans to appeal the conviction.

Lawyers for Mr. Kuhrt weren't immediately available for comment.

Former Texas businessman Mr. Stanford is serving a 110-year sentence for stealing billions of dollars in investors' money and investing much of it in unprofitable private businesses he controlled. Laura Pendergest-Holt, Stanford's former chief investment officer, is serving a three-year sentence.

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The District Court Rules in Favor of the Receiver in His Claim to Recover Net Winnings Paid to Stanford "Net Winner" Investors

January 23, 2013
By U.S. Receiver (Ralph Janvey)

On January 23, 2013, the District Court entered a summary judgment order in favor of the Receiver finding that the Receiver is entitled to recover from Stanford investors any funds they were paid in excess of the principal they deposited in the Stanford fraud scheme. The Court ruled that the net winner investors' contracts with Stanford are void and unenforceable and that the investors did not provide value for amounts they received from Stanford in excess of the amounts they deposited. As a result, the Court held that that allowing the net winner investors "to keep their fraudulent above-market returns in addition to their principal would simply further victimize the true Stanford victims, whose money paid the fraudulent interest." Although the District Court's order is not a final judgment, the District Court certified the order for appeal, which means that it will likely be appealed in the near future to the US Court of Appeals for the Fifth Circuit.

The Receiver is pleased with the Court's ruling today that those investors who profited from the Stanford ponzi scheme do not have the right to retain those profits. This decision represents an important milestone in the very long and difficult process of unwinding the massive Stanford ponzi scheme. In his ruling, Judge Godbey agreed with the Receiver's position that the fictitious interest payments that Stanford made to investors on their Stanford International Bank certificates of deposit simply represented money taken from one set of investors and paid to another; it was just part of Stanford's efforts that kept the ponzi scheme going for well over a decade.

Based on his investigation, the Receiver identified over $220 million in net winnings or fictitious interest that was paid to over 800 investors. The Receiver intends to use this ruling to pursue recovery of these funds for the benefit of the thousands of investors who sustained significant losses on their Stanford CDs. Once recovered, these funds can be distributed to the victims of the Stanford fraud, which would be in addition to the $55 million that the Receiver has already proposed for distribution.

The Receiver is continuing to pursue recovery through litigation of other funds that can be distributed to victims, and he continues to work cooperatively with the U.S. Department of Justice and the Antiguan-appointed Liquidators to reach a final agreement to make available for distribution approximately $300 million in funds and assets currently frozen in foreign countries.

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