Assistant Attorney General Lanny A. Breuer signaled his keen interest in the case of accused fraudster R. Allen Stanford by traveling to Houston to listen Tuesday to testimony in Stanford’s trial, including eye-popping accounts of Stanford’s free-spending habits.
Breuer, head of the Department of Justice’s Criminal Division, said he has been following the case through news reports. Citing a court order not to discuss the case, he declined to comment further. But it is hard to imagine anyone listening to the session without thinking, “Gee, we’re talking about real money here!”
Breuer heard FBI agent Robert Martin recount how Stanford lost $1.1 million at the Bellagio hotel and casino in Las Vegas and gave another $1 million or so in cash to family members, including his wife and girlfriend. The Texas financier also spent $20 million on yachts, $37 million promoting cricket tournaments, $333 million on a pair of start-up Caribbean airlines, and another $379 million to underwrite part of his company, according to a report by Bloomberg.
“Did that represent all his spending?” asked Andrew Warren, a trial attorney in the Fraud Section of the Department of Justice.
“No, not at all,” Martin replied.
The prosecution has introduced evidence that Stanford spent hundreds of millions, which investors thought was safe in liquid assets, on business ventures that went nowhere and on various hobbies and frivolities. Stanford, 61, faces up to 20 years in prison if he is convicted. His lawyers contend that at the time regulators shut him down he was consolidating his holdings with the intent of paying back investors.
As Main Justice reported recently, Breuer has cited the Stanford case to counter suggestions that the DOJ has too often tried to net small fry while the big financial-fraud sharks continue to prey on the unwary.
Breuer was also an interested spectator several weeks ago a trial in Washington, D.C., of five military products brokers charged with violating the Foreign Corrupt Practices Act for agreeing to pay $1.5 million in bribes to the defense minister of Gabon for military supply contracts. The fake deal was run as a sting by undercover FBI agents. (See Main Justice’s report.)
Perhaps Breuer wishes he had stayed away, as the “sting” case ended in acquittals and a mistrial.
Breuer was a far happier spectator at the trial of Lee Farkas, a former mortgage executive convicted last year in the Eastern District of Virginia of a huge fraud, as Main Justice reported at the time. “Finally, a big fish,” an American Bar Association publication declared.
Correction: Earlier versions of this article stated incorrectly that Andrew Warren is an Assistant United States Attorney in the Southern District of Texas.