Stanford Had Planes, Castle and Island, Court Papers Show
By Jef Feeley and Laurel Brubaker Calkins
Feb. 20 (Bloomberg) -- Billionaire R. Allen Stanford, accused of running a “massive fraud” through his Stanford Group Co., owned a fleet of aircraft worth $100 million and once lived in a Florida castle, according to court papers.
The 58-year-old Stanford, who had an estimated net worth of at least $2 billion according to a March 2008 filing in a paternity case in Florida, faces claims by regulators that he defrauded investors while selling $8 billion in certificates of deposit issued by a bank in Antigua. A federal judge has agreed to freeze assets of Stanford and his companies and appoint a receiver to account for investor money.
Some of those assets, including private jets and a 120-foot yacht, were listed in filings in a paternity case filed by Louise Sage Stanford, the mother of two of the billionaire’s children. FBI agents said yesterday they found Stanford and a girlfriend in Virginia and served them with court papers related to the U.S. Securities and Exchange Commission lawsuit.
Stanford “owns a fleet of aircraft worth approximately $100 million,” said lawyers for Louise Stanford in a March 2008 filing seeking child support. The pair never married, and Stanford never contested that he was the father of the woman’s two children, according to court records.
“Needless to say, the children do not fly commercially for their travel,” the lawyers said in the filing in state court in Miami.
No Criminal Charges
The SEC has been investigating Stanford Group since at least last summer over certificate sales. The probe intensified after the December arrest of New York money manager Bernard Madoff, who allegedly confessed to masterminding a $50 billion Ponzi scheme.
No criminal charges have been filed against Stanford. Regulators contend the billionaire, a citizen of Antigua & Barbuda, misled investors about returns on the CDs and the assets behind them.
ABC News reported yesterday that Stanford’s lobbyist, Ben Barnes, said the financier hired Brendan Sullivan of the Washington law firm Williams & Connolly LLP to represent him. Sullivan didn’t immediately respond to a call and e-mail seeking comment. Sullivan’s assistant said “he has not been retained.”
Melissa J. Jacobs, one of Stanford’s lawyers in the Florida paternity action, didn’t return calls for comment late yesterday.
Maurice Jay Kutner and Anthony P. Sabatino, listed in court records as Louise Sage Stanford’s lawyers in the Florida case also were unavailable for comment late yesterday. The firm’s phone number didn’t provide a way of leaving a message.
In the Florida case, Stanford was identified as “the owner of banks in various countries and a brokerage firm, which has over 5,000 employees,” according to lawyers for Louise Sage Stanford.
Wackenhut Castle
“He also owns restaurants, airplanes and substantial real properties, including an island in the Caribbean!” the lawyers added in the March 2008 filing. The island wasn’t identified.
Aviation LLC, a unit of the billionaire’s company, has four to six airplanes registered with the Federal Aviation Administration, according to its Web site. The registry’s list includes two Hawker 800XPs, a Bombardier BD700-1a10, two Gulfstream Aerospace G-IVs and a Hawker Siddeley HS-125-600A.
Stanford, his girlfriend and their two children also once lived in the “Wackenhut Castle,” a three-acre estate in a Miami suburb that the billionaire bought for $10 million, according to the filing. Stanford, a native of Mexia, Texas, began using the title “Sir” in 2006 after being knighted by the leaders of Antigua & Barbuda.
57 Rooms
The Coral Gables, Florida-home was built in 1974 by George Wackenhut, a former FBI agent and founder of the Wackenhut Corp. That firm, now a unit of G4S Plc, provides security services to companies and governments.
The 18,000-square-foot, 57-room castle included a moat, tower, pub and a man-made cliff, according to a history of the estate written by Jerry Allison, owner of a Palm Beach, Florida- based architectural salvage firm. He’s offering some of the estate’s fixtures for sale, according to his Web site.
The castle was demolished in 2008, according to Ivan Rodriguez, a Coral Gables architect who is a former preservation official for the city.
“I’m not sure why it was demolished, but it was probably to make way for a bigger and better mansion,” said Rodriguez, a partner in R.J. Heisenbottle Architects PA.
Stanford’s girlfriend and his children moved out of the castle in June 2004 and into a 12,000-square foot home that they rented for $25,000 a month, according to a March 2008 filing in the paternity case.
‘Privileged’ Lifestyle
After the pair broke up, Stanford paid $850,000 a year in housing, food and private-school costs to ensure his children maintained their “privileged and luxurious lifestyle,” his girlfriend’s lawyers said in the March 2008 filing.
The amenities included a new Lincoln Navigator and driver available 24 hours a day, seven days a week to chauffeur the children, according to an October 2007 filing.
“All the children need to do is pick up the phone and say, please pick me up from school, please take me to gym, please take me to tennis, and there is a bonded, insured driver” to do so, according to the filing.
Stanford also picked up the $50,000-per-year tab for the Gulliver Academy, a private school, and gave $6,000 worth of Christmas gifts to teachers, lawyers said in the filing.
He also provided as much as $75,000 for Christmas gifts and vacations for the children, and set aside $1 million for each in a trust account, the filings show.
$272,322 a Month
Stanford listed monthly income of $272,322.40 in a child- support worksheet attached to the March 2008 filings. The figure was based on the billionaire’s 2007 W-2’s and “correspondence from Father’s accountant regarding his personal income in 2007,” according to a footnote on the worksheet.
His girlfriend’s lawyers disputed that figure, noting in the filings that their experts estimated Stanford’s annual income at about $50 million per year based on his $2 billion net worth.
The billionaire’s girlfriend dismissed the Florida paternity case in August 2008, according to court filings. The docket said both parties agreed to dismiss the case.
Stanford is now embroiled in a divorce action in Texas, according to court records. Susan J. Stanford filed for divorce in November 2007, according to the filing in state court in Houston.
Texas Separation
A judge ordered R. Allen Stanford to pay “temporary spousal support” of $100,000 per month. The couple had been separated for 10 years, according to Bucky Allshouse, Stanford’s Texas divorce lawyer.
The judge also gave Susan Stanford “free use” of her estranged husband’s corporate jets, yacht and an estate in Antigua, according to the filing. She was also given use of a 7,000-square-foot Houston mansion valued at $2.5 million, a 2,803-square foot high-rise condominium unit valued at $1.3 million, two Mercedes and a 1998 Porsche Boxter sports car.
Stanford got the rights to the couple’s house in St. Croix and all motor vehicles in his possession, the filing shows.
The Houston-based Allshouse said he finds the fraud allegations against his client hard to accept.
“These allegations are shocking and hard to believe. He’s so charismatic, so personable, very likable,” Allshouse said in an interview in Houston yesterday. “My guess is he could walk into a room of people tonight, and if you didn’t know what was going on, you’d probably put money in his bank now.”
The case is SEC v. Stanford International Bank Ltd., 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas).
To contact the reporters on this story: Jef Feeley in Miami, Florida at jfeeley@bloomberg.net; Laurel Brubaker Calkins at laurel@calkins.us.com.
Last Updated: February 20, 2009 00:01 EST |
