Stanford had secret fund for bribes, yacht

Texas financier Allen Stanford drew on a secret Swiss bank account for personal expenses such as yacht maintenance and to pay bribes, the government's top witness said at Stanford's fraud trial on Friday. Stanford, 61, is accused of bilking thousands of investors out of their savings by selling fraudulent certificates of deposit through his bank in the Caribbean.
Prosecutors say the $7 billion Ponzi scheme is one of the biggest white collar crimes since Bernard Madoff's scam. Stanford has pleaded not guilty to all charges. "The monies flowed from Stanford International Bank CDs to this slush account at SocGen," former Stanford Chief Financial Officer James Davis told jurors. "It was a slush fund."
Davis, 63, said Societe Generale account number 108731 was known only to himself and to Stanford. Stanford tapped the account regularly for millions of dollars at a time to pay for expenses such as maintenance of his fleet of private jets and his 100-foot yacht, the "Sea Eagle."
As Davis testified, Stanford sat, head down, taking notes. Davis is the only person among those charged in the alleged Ponzi scheme who has pleaded guilty. He is the government's star witness. Prosecutors accuse Stanford of misleading investors by telling them CD proceeds were invested in safe financial instruments such as blue chip stocks and bonds. Instead, Stanford used funds for illiquid investments such as Caribbean real estate and start-up companies starved for capital, prosecutors said.
Asked why Stanford deposited funds from the Swiss account into an account in Antigua, Davis said it was partly to pay bribes to Leroy King, a regulator in Antigua, where Stanford's bank was based. "He said that, for one purpose, it was to pull cash out to pay bribes to the regulators, Lee King," Davis said.