HOUSTON (CN) - The jury that convicted Allen Stanford of a multibillion-dollar investment fraud is deciding whether the government can seize $330 million in 29 foreign bank accounts that prosecutors say came from the scheme.
U.S. District Judge David Hittner convened the separate civil forfeiture hearing immediately after the jury found Stanford guilty in his criminal trial Tuesday.
Stanford was convicted of leading a $7 billion Ponzi scheme by selling certificates of deposit with phony interest rates issued by his Antigua-based Stanford International Bank.
U.S. Postal Inspector Clayton Gerber was the only witness prosecutors called for the forfeiture hearing.
Gerber told prosecutors he had been working on the Stanford case for 3 years, reviewing volumes of documents that trace the flow of cash to and from Stanford International Bank accounts.
In a dizzying exchange that made the million-dollar figures sound like pocket change, prosecutor Andrew Warren asked Gerber about his work "cash tracing" Stanford International Bank's accounts in Canada, Switzerland, the Cook Islands and the Isle of Man.
The Cook Islands is a small group in the South Pacific, and the Isle of Man is a small island between Ireland the United Kingdom.
Gerber told prosecutors that all of the money in Stanford International Bank's 29 foreign accounts was "directly traceable to Mr. Stanford's fraud."
Stanford's defense attorney Ali Fazel took exception to Gerber's testimony, while cross-examining him.
"Do you have a complete set of all credit, debits and bank statements for the accounts you have been talking about?" Fazel asked Gerber.
"I have a voluminous set of credit and debits related to the accounts," Gerber replied. He acknowledged that he did not review each and every transaction in the accounts.
Fazel then went through the accounts with Gerber, asked questions so quickly that Judge Hittner had to ask him to slow down several times
"Have you looked at all transactions on that account? Do you know what the opening balance was?" Fazel asked.
"I don't recall looking at all the transactions. I don't recall the opening balance," Gerber said.
Gerber said he had gone back 10 years on the accounts for his cash-tracing investigation.
"If you're limiting yourself to 10 years, aren't you making assumptions about how the money flowed?" Fazel asked. "Aren't you making assumptions about money in the accounts to begin with?"
Gerber disagreed, saying it's possible to trace the money to the Stanford International Bank's certificate of deposit sales without having all the account records.
After Gerber left the stand, opposing counsel argued about a phrase in the verdict form Hittner was to read to the jury before its deliberations.
Fazel protested the phrase, "the United States will not keep any of the seized property," claiming: "It's not relevant what the U.S. government does with the funds."
Hittner asked Fazel's co-counsel Robert Scardino to explain, "bottom line," why leaving the phrase in the verdict form mattered.
"Well, it helps the government's case because if the jury thinks the government's going to get the money they're less likely to rule for the seizure," Scardino said.
Prosecutor Gregg Costa appeared flustered by the off-the-record exchange, telling Hittner: "The government's position is that any funds will be remitted to the victims. ... It's not clear what mechanism to use but the policy of the DOJ has always been to remit seized assets to victims."