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Federal judge orders return of gold seized in Stanford investigation

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] A federal judge on Tuesday ordered that $21.2 million in gold coins and bullion seized last year from the offices of Allen Stanford be returned to investors. Stanford is accused of defrauding investors out of $7 billion. Judge David Godbey of the US District Court for the Northern District of Texas ruled that the gold must be returned to the more than 200 investors whose assets were stored in the Stanford vaults. Also Tuesday, Stanford's lawyers asked the US Court of Appeals for the Fifth Circuit to review a lower court order denying him bail. Last week, it was reported that the US Department of Justice has begun investigating political donations and other connections between Stanford and US lawmakers. Stanford donated more than $2.3 million to lawmakers' campaigns and spent more than $5 million in lobbying efforts while allegedly carrying out the fraud. Stanford has denied the charges against him and was originally set to be released on $500,000 bail until prosecutors successfully appealed the decision. Through three of his investment companies, Stanford allegedly violated the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940. He was originally charged in February with running a fraudulent investment scheme by selling certificates of deposit on the promise of improbably high interest rates.

Full post as published by JURIST - The Paper Chase on January 06, 2010 (boomark / email).