HOUSTON (CN) – R. Allen Stanford, the jailed financier accused of running a $7 billion Ponzi scheme, accused FBI agents, the SEC and federal prosecutors of “using illegal tactics to prosecute” him. In a federal complaint, Stanford accuses the federal officials of using $51 million of his money to fund their investigation of him, “while, at the same time, refusing, denying and opposing any attempt by Mr. Stanford to obtain funds to defend himself.”
Stanford was indicted in June 2009, charged with running a $7 billion Ponzi scheme by selling certificates of deposit at Stanford International Bank on Antigua, with promises of substantial, but unreal, returns.
The SEC sued Stanford in Dallas in February 2009, and a receiver was appointed to seize his assets.
“In purpose and effect, the receiver became nothing more than an arm, instrumentality, and agent of the criminal prosecutors upon his appointment,” Stanford says in his 39-page complaint.
Stanford claims the 12 named defendant agents violated his civil rights by not telling him in the civil proceeding “that the agents contemplated criminal prosecution;” by not appointing a lawyer for him or releasing funds for him to hire one; by taking all his assets without giving him a chance to contest the seizure; by getting a warrant to search his “property worldwide without a particularized showing;” by excessively fining him; and by creating “an environment of adverse publicity where the media have pilloried and convicted Mr. Stanford before he has been afforded a right to contest the charges in open court.”
Before his indictment, Stanford says, as the SEC investigated him and his companies, the federal agency became frustrated that he and his bank would not violate “Antiguan Bank Secrecy Laws,” by delivering bank records of depositors.
“In the wake of the Bernie Madoff scandal in December 2008” – which did not reflect well upon the SEC – Stanford says, the SEC took a renewed interest in him for “political reasons wholly unrelated to alleged civil and/or criminal violations of the Securities & Exchange Act.”
He claims the SEC also “saw an opportunity to use civil enforcement processes to obtain evidence for purposes of criminal prosecution.”
Stanford adds that his health has deteriorated since he was indicted and jailed.
“On September 24, 2009, Mr. Stanford was brutally beaten by inmates at the Joe Corley Detention Center” in Houston, according to the complaint.
He claims that a neuro-phychiatrist determined that brain injuries he suffered in the assault rendered him incompetent to stand trial.
On Jan. 26 a judge agreed, and declared Stanford “incompetent to assist counsel at trial in the criminal case. Mr. Stanford was committed to the custody of the Attorney General of the United States for treatment to restore him to competency,” according to the complaint.
It continues: “Mr. Stanford was declared incompetent to stand trial based, in pertinent part, on the fact that he suffered traumatic brain injury and was not treated for this injury. In addition, Mr. Stanford was subsequently overmedicated by government doctors with [sic] administered high dosages of Klonopin, a benzodiazepine drug, to Mr. Stanford for a period of over thirteen (13) months.”
Federal agents are taking Stanford to a medical facility in a federal prison in Butner, N.C., according to news report.
Bernie Madoff is serving a 150-year sentence at that prison, for his Ponzi scheme.
Stanford seeks punitive damages in addition to the $7.2 billion in actual and consequential damages he says the federal agents caused him.
He is represented by Stephen Cochell of Houston.