HOUSTON (AP) — The fate of Texas tycoon R. Allen Stanford — accused of orchestrating a massive Ponzi scheme that took billions from investors — rests in the hands of the Houston jury, as prosecutors and defense attorneys presented their closing arguments in the financier's fraud trial Wednesday.
During closing arguments, prosecutors said Stanford flushed away billions of investor funds on a "lavish lifestyle and his loser companies" as part of a fraud that spanned two decades. Defense attorneys countered, saying no evidence was presented that showed the financier cheated anyone. They contended Stanford made money for his investors and created more than 5,000 jobs through a legitimate, worldwide business empire.
Jurors deliberated for about two hours Wednesday. They were set to resume on Thursday.
Stanford, who has been jailed without bond since being indicted in 2009, is on trial for 14 counts, including mail and wire fraud. If convicted, he could be sentenced to more than 20 years in prison. The financier's trial began Jan. 23.
Prosecutor William Stellmach told the jury on Wednesday that Stanford, 61, lined his pockets "with billions of dollars of other people's money." He said that Stanford for years lied to investors who bought certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua, telling them it was a safe investment.
Prosecutor Gregg Costa called Stanford a thief and compared him to Bernie Madoff, who orchestrated the largest Ponzi scheme in history.
"Don't let him pull one last con job," Costa said.
Stanford's attorneys, Ali Fazel and Robert Scardino, told jurors Wednesday "there's no doubt" he made money for people who bought his bank's CDs. They also said that until the financier's businesses were seized by authorities, he paid investors "every penny of their money."
Scardino accused prosecutors of targeting Stanford because he was rich and told jurors that investors were warned they could lose all their money.
"The government wants you to believe it was all a fraud. That's just not what happened," he said.
During closing arguments, Stellmach said depositors were never told their investments paid for a string of failed businesses that lost millions. Nor were investors told their money funded his extravagant lifestyle, which included yachts and private jets, he said.
"The bank was his own personal ATM," Stellmach said.
Stellmach said that by 2008, the bank owed depositors over $7 billion that it did not have and Stanford was responsible for the massive debt.
The prosecutor said Stanford covered up the massive fraud by falsely telling depositors their money was protected by an insurance policy and that the bank had been given a clean bill of financial health through reviews from an outside auditor and Antiguan regulators. Stellmach told jurors that both the auditor and regulators were bribed with millions from a secret Swiss bank account.
"A real audit would have discovered this fraud in about five minutes," he said.
Over a three-week period, federal prosecutors methodically presented their case — including testimony from ex-workers of Stanford's companies as well as emails, financial statements and other documents they allege showed the financier bilked investors out of more than $7 billion.
The prosecution's star witness, James M. Davis, the ex-chief financial officer of Stanford's companies, told jurors he and Stanford faked the bank's profits and used CD deposits to bribe the auditor and regulators.
Defense attorneys argued that Stanford was a savvy businessman whose business empire, headquartered in Houston, was legitimate. They blamed Davis for the alleged fraud, and said he lied to get a reduced sentence. Davis has pleaded guilty as part of a deal with prosecutors.
Stanford's attorneys, who spent about nine days presenting their case, did not put the businessman on the witness stand. Stanford had apparently wanted to testify but was convinced not to do so.
Stanford was once considered among the wealthiest people in the U.S. with an estimated net worth of more than $2 billion. But at his trial, he had court-appointed attorneys because his assets have been seized by authorities.
If jurors come back with a verdict after 2 p.m. Thursday or anytime Friday, the decision won't be announced until Monday because U.S. District Judge David Hittner has a prior engagement. Jurors can still deliberate on those days, and a magistrate judge will be available to answer questions.
The federal judge also said that if the jury returns a guilty verdict on any count, a shorter, civil trial related to 31 U.S. properties that authorities want to seize from Stanford would immediately follow with the same jury.
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