Supreme Court rejects financier Stanford's Ponzi scheme appeal

November 28, 2016 9:56 AM EST

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By Lawrence Hurley

WASHINGTON (Reuters) - The Supreme Court on Monday rejected Texas financier Robert Allen Stanford's bid to overturn his conviction and 110-year prison sentence for running what prosecutors called a $7.2 billion Ponzi scheme that bilked investors in 113 countries.

The justices left in place the imprisoned Stanford's appeal of an October 2015 ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals that upheld his 2012 conviction and sentence arising from one of the largest such frauds ever uncovered in the United States.

Federal prosecutors said he ran a scam for two decades that defrauded some 30,000 investors and centered on the sale of fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank.

They said he used investor funds to make risky investments, pay bribes and fund a lavish lifestyle including mansions, yachts and private jets. Authorities uncovered the scheme in 2009.

Once considered a billionaire but later declared indigent, Stanford was convicted by a Houston jury in March 2012 on charges of conspiracy, wire and mail fraud, obstruction and money laundering.

"I didn't defraud anybody," he said at his sentencing.

Stanford, 66, is housed in the high-security Coleman II federal prison in Sumterville, Florida. He is not eligible for release before 2105, according to the Federal Bureau of Prisons.

The appeals court rejected his arguments that he was not competent to stand trial, prosecutors did not prove their case, the sentence was too long, and the trial judge was biased.

A Ponzi scheme is a fraudulent investment operation promising high rates of return with low risk to those who invest. Ponzi scheme operators skim investor cash into their own pockets, while paying early investors with money from later investors. A Ponzi scheme requires a constant flow of new investment money or the whole thing collapses.

The U.S. Securities and Exchange Commission filed related civil charges over Stanford's fraud. A court-appointed receiver has been liquidating Stanford's companies.

In a separate Stanford-related case, the Supreme Court in 2014 ruled that investors in the Ponzi scheme can sue lawyers, insurance brokers and others who worked with him.

In September, insurance brokerage Willis Towers Watson Plc agreed to pay $120 million to settle one of the lawsuits brought by former investors.

(Reporting by Lawrence Hurley; Additional reporting by Jonathan Stempel in New York; Editing by Will Dunham)



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