HOUSTON — Texas billionaire R. Allen Stanford pleaded not guilty Thursday to charges that he swindled investors out of $7 billion as part of a massive investment scam.
Stanford entered his plea during his arraignment in federal court. The financier was indicted on charges that his international banking empire was really just a colossal Ponzi scheme.
At a bail hearing shortly after Stanford’s arraignment, a magistrate set bail at $500,000 but delayed his release until today to give prosecutors time to appeal.
Two family members and a friend agreed to pay the bail set by U.S. Magistrate Frances Stacy, but she delayed her decision to release Stanford until this afternoon to give prosecutors time to appeal to the judge who will hear the case.
Prosecutors argued that Stanford should be held without bail because he might have access to billions of dollars in secret funds.
Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, three executives with the now-defunct Houston-based Stanford Financial Group who were indicted along with their former boss, also entered not-guilty pleas.
Prosecutor Paul Pelletier said investigators found a secret Swiss account Stanford controlled that was drained of more than $100 million in December.
Jeffrey Ferguson, a forensic examiner hired to review the records of Stanford Financial Group and its affiliated bank on the Caribbean island of Antigua, testified that nearly $1.2 billion of the $7 billion Stanford and his co-defendants are accused of bilking from investors can’t be accounted for.
In court documents filed Thursday, prosecutors also said Stanford faces a potential life sentence, has access to a private jet and has a network of wealthy friends who would help him.
Stanford has been in federal custody since he was arrested in Virginia on June 18.
