DOJ investigating financier Stanford connections to legislators: report

[JURIST] The US Department of Justice [official website] has begun investigating political donations and other connections between billionaire financier Allen Stanford [BBC profile; JURIST news archive], accused of defrauding investors [indictment, PDF; JURIST report] out of $7 billion, and US lawmakers, according to a Sunday report [text] by the Miami Herald. Stanford donated over $2.3 million to lawmakers' campaigns and spent over $5 million in lobbying efforts while allegedly carrying out the fraud. According to the report, investigators have recovered emails between Stanford and several legislators and are investigating whether Stanford used the money to gain unlawful favors. It is speculated that legislation that Stanford successfully lobbied against would have likely exposed his use of offshore accounts to conduct his alleged scheme. Stanford's trial is set to begin in January 2011.

Last week, a federal judge denied a motion [Reuters report] by Stanford's lawyers seeking his release on bail on the basis of mental health concerns. Stanford has denied the charges [JURIST report] against him and was originally set to be released on $500,000 bail until prosecutors successfully appealed the decision. 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 originally 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.



 

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