Stanford charged in $7 billion Ponzi scheme

— -- Texas billionaire Robert Allen Stanford, whose troubled Antigua-based banking empire collapsed earlier this year, was indicted on criminal conspiracy, fraud and other charges Friday in an alleged $7 billion scheme that bilked an estimated 30,000 investors, federal authorities said.

The 21-count indictment also charged Laura Pendergest-Holt, the financier's former chief investment officer; Mark Kuhrt, his banking group controller; Gilberto Lopez, his chief accountant; and Leroy King, a former chief of Antigua's financial regulatory commission who allegedly took bribes in exchange for his positive reports on Stanford's banking operation.

The Securities and Exchange Commission simultaneously amended the civil case the agency filed against Stanford in February by adding additional defendants and details of what the agency called a "massive Ponzi scheme" that operated for at least the last decade.

The criminal indictment accused the defendants of marketing Stanford International Bank certificates of deposit that offered "consistent double-digit returns" at interest rates that "greatly exceeded" those at U.S. banks and featured safety and security.

As part of the alleged marketing pitch, the indictment charged the defendants falsely told investors the Antigua-based bank's value skyrocketed from about $1.2 billion in 2001 to approximately $8.5 billion by December 2008.

The banking operation gave money to some investors to help "perpetuate the false appearance" that Stanford's financial empire "was financially sound," the indictment charged.

In fact, roughly 80% of the bank's investment portfolio consisted of illiquid investments, including more than $1 billion in personal loans to Stanford himself and "grossly overvalued" real and personal property acquired from Stanford-controlled entities, the indictment charged.

Most of the Stanford banking group assets were "misused and misappropriated," in secret transactions that defrauded investors, federal authorities charged. Many of those transactions allegedly benefited Stanford, 59, who was listed on the Forbes 400 list of the richest Americans and was knighted in Antigua, where he staged internationally-promoted cricket matches on a lavish estate.