In a result that probably surprised few, Robert Allen Stanford was convicted on Tuesday, March 6, 2012 for his decades-long Ponzi scheme that bilked investors of over $7 billion. As reported by the New York Times (here), "the jury cleared Mr. Stanford of only one of several counts of wire fraud, but found him guilty of every other count of conspiracy to commit mail fraud, launder money and obstruct justice."

Mr. Stanford, who was arrested in June 2009, was charged with a scheme under which investors who trusted Mr. Stanford with their funds were told that the money was placed in certificates of deposit at the Stanford International Bank based in Antigua. Investors were told that the CDs would pay a higher-than-average rate of return, but instead, Mr. Stanford used the money to, among other things, fund his luxurious lifestyle. James Davis, the former CFO of the Stanford Financial Group was one of the key witnesses who testified against Mr. Stanford, telling the jury, as reported by the Times, "that anyone who wanted to know the truth about the Stanford enterprises had only to ‘follow the money, just follow the money.’"

As noted in the Times article, Mr. Stanford was severely injured in a 2010 fight with inmate in a Texas prison and became addicted to prescription medication. There was some question as to whether he was fit to stand trial, but Judge David Hittner ultimately ruled that he was. The defense argued at times that he could not defend himself because memory loss. However, after a six-week trial, the jury took five days to reach a verdict.

Although we rarely discuss Ponzi schemes in this blog, Mr. Stanford’s scheme was one of those rare cases that rivaled the Bernie Madoff case. Ironically, following Mr. Madoff’s December 2008 arrest, investors were told that the Stanford companies had not suffered any Madoff-related losses.