Fifth Circuit Affirms Conviction in Texas Ponzi Scheme Case

David Stanley [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia CommonsThe Fifth Circuit Court of Appeals affirmed the conviction of a Texas financier on multiple counts in connection with what the federal government called a “$7.2 billion Ponzi scheme.” United States v. Stanford, No. 12-20411, slip op. (5th Cir., Oct. 29, 2015). A jury convicted the defendant on multiple counts in 2012, and the court sentenced him to 110 years in prison. Grounds for appeal included claims that he was not competent to stand trial, that the court improperly denied his request for a continuance, and that a criminal proceeding that occurs simultaneously with a civil proceeding by the Securities and Exchange Commission (SEC) violates the Double Jeopardy Clause of the Fifth Amendment. The pretrial portion of the case produced multiple reported decisions and interlocutory appeals that illustrate the complexity of a large white-collar criminal case.

Prosecutors filed a twenty-one count indictment against the defendant in June 2009. The counts included wire fraud, 18 U.S.C. § 1343; mail fraud, 18 U.S.C. § 1341; obstruction of an SEC investigation, 18 U.S.C. § 1505; and various conspiracy charges. A lengthy series of motions and appeals began when the trial court granted prosecutors’ motion for revocation of the defendant’s’ release order. 630 F.Supp.2d 751 (S.D. Tex. 2009). The Fifth Circuit affirmed this order, 341 F. App’x 979 (5th Cir. 2009), and then affirmed an order denying the defendant’s motion to reconsider. 367 F. App’x 507 (5th Cir. 2010).

The trial court denied the defendant’s motion for release or for dismissal of the indictment several months later, 722 F.Supp.2d 803 (S.D. Tex. 2010), and the Fifth Circuit affirmed that order. 394 F. App’x 72 (5th Cir. 2010). Shortly afterwards, the U.S. Supreme Court denied the defendant’s first petition for writ of certiorari. 131 S.Ct. 1028 (2011). The defendant filed a motion to determine competency under the Insanity Defense Reform Act of 1984, 18 U.S.C. § 4241 et seq., and the trial court ordered a psychiatric evaluation. 769 F.Supp.2d 1083 (S.D. Tex. 2011).

The defendant appealed on the issue of pretrial detention a fourth time. The Fifth Circuit dismissed the appeal on the ground that it lacked jurisdiction. No. 10-20776, slip op. (5th Cir., Mar. 14, 2011). After a multi-day hearing in December 2011, the court ruled that the defendant was competent to stand trial. It denied the defendant’s motion for continuance several days later, finding no violation of the Speedy Trial Act, 18 U.S.C. § 3161 et seq. The court stated rather bluntly that “this case needs to be tried.” 832 F.Supp.2d 767, 771 (S.D. Tex. 2011). At the beginning of 2012, the Supreme Court denied a second petition. 132 S.Ct. 997 (2012).

A jury trial began in January 2012 and lasted roughly seven weeks. The jury convicted the defendant of thirteen counts: four counts of wire fraud, five counts of mail fraud, one count of obstruction of an SEC investigation, one count of conspiracy to commit wire and mail fraud, one count of conspiracy to obstruct an SEC investigation, and one count of conspiracy to commit money laundering. That May, the trial court issued a memorandum opinion to accompany its earlier order finding the defendant competent to stand trial. 860 F.Supp.2d 371 (S.D. Tex. 2012).

These blog posts are meant to be illustrative only. Unless expressly stated to the contrary herein, these matters are not the result of any legal work of Michael J. Brown, but are used to communicate a particular point of view. Michael J. Brown does not claim credit for any legal work done by any lawyer or law firm either generally or specifically, with respect to the matters contained in this blog.

Board-certified criminal defense lawyer Michael J. Brown has advocated for the rights of people charged with alleged white-collar offenses in state and federal courts in West Texas for over twenty years. Please contact us online or at (432) 687-5157 today to schedule a confidential consultation to see how we can help you.

More Blog Posts:

SEC Rejects Constitutional Challenge in Securities Fraud Case, Texas Criminal Lawyer Blog, December 23, 2015

Court Reviews Proof Requirements in Prosecution for Honest Services Fraud, Texas Criminal Lawyer Blog, March 25, 2013

Conviction for Bank Fraud Overturned Due to Lack of Evidence of Intent to Harm the Bank, Texas Criminal Lawyer Blog, January 23, 2013

Photo credit: David Stanley [CC BY 2.0], via Wikimedia Commons.