United States v. Stanford

• Decision Date: 29 October 2015
• Docket Number: No. 12–20411.,12–20411.
• Citation: 805 F.3d 557
• Parties: UNITED STATES of America, Plaintiff–Appellee v. Robert Allen STANFORD, also known as Sir Allen Stanford, also known as Allen Stanford, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

805 F.3d 557

UNITED STATES of America, Plaintiff–Appellee

v.Robert Allen STANFORD, also known as Sir Allen Stanford, also known as Allen Stanford, Defendant–Appellant.

No. 12–20411.

United States Court of Appeals, Fifth Circuit.

Oct. 29, 2015.

Lauretta Drake Bahry, Assistant U.S. Attorney, Renata Ann Gowie, Assistant U.S. Attorney, U.S. Attorney's Office, Houston, TX, for Plaintiff–Appellee.

Robert Allen Stanford, Coleman, FL, pro se.

Appeals from the United States District Court for the Southern District of Texas.

Before BENAVIDES, CLEMENT and HIGGINSON, Circuit Judges.

Opinion

EDITH BROWN CLEMENT, Circuit Judge:

After a jury trial, Robert Allen Stanford was convicted of one count of conspiracy to commit wire fraud and mail fraud in violation of 18 U.S.C. §§ 1341, 1343, and 1349 ; four counts of wire fraud in violation of 18 U.S.C. §§ 1343 and 2; five counts of mail fraud in violation of 18 U.S.C. §§ 1341 and 2; one count of conspiracy to obstruct a Securities and Exchange Commission (“SEC”) investigation in violation of 18 U.S.C. §§ 1505 and 371; one count of obstruction of an SEC investigation in violation of 18 U.S.C. §§ 1505 and 2; and one count of conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h). On appeal, Stanford asserts ten issues: (1) that the district court lacked jurisdiction; (2) that the indictment was defective and was constructively amended at trial; (3) that the district court erred in denying his request for continuance; (4) that simultaneous civil and criminal proceedings constituted double jeopardy; (5) that authorities seized certain evidence in violation of the Fourth Amendment; (6) that the trial court erred in instructions to the jury; (7) that his sentence was based on improper enhancements; (8) that the district court was not impartial and showed favoritism to the government; (9) that cumulative error denied him a fair trial; and (10) that the government failed to provide exculpatory evidence. We AFFIRM.

BACKGROUND

After a failed fitness-club venture in Texas, Robert Allen Stanford eventually rebranded himself as a banker in the Caribbean, forming Guardian International Bank, Ltd., (“Guardian”), on the island of Montserrat. Guardian advertised certificates of deposit (“CDs”) averaging higher returns than those offered by banks in the United States, and Guardian's marketing materials and annual reports assured its customers that the bank pursued sound, conservative investment strategies and subjected itself to rigorous independent audits. In 1990, however, Montserrat's Ministry of Finance and Economic Development notified Stanford of its intent to revoke Guardian's banking license, citing various regulatory violations. In response, Stanford relocated the bank to the nearby island of Antigua, renaming it Stanford International Bank, Ltd. (“SIB”).

Like its predecessor, SIB offered higher-return CDs supported by detailed marketing materials and annual reports showing steady growth. Stanford then established the Stanford Group Company (“SGC”), a broker-dealer and investment advisor headquartered in Houston, Texas, to expand the SIB CD market into the United States. Stanford's financial empire grew rapidly over the following years while Stanford spent lavishly, purchasing boats, mansions, and personal aircraft and sponsoring high-dollar cricket tournaments.

During the financial crisis of 2008, Stanford's investors sought CD redemptions in large numbers while new sales slowed down. SIB was unable to pay the redemptions. In February of 2009, a court-appointed receiver took control of Stanford's companies. At the time, SIB owed billions of dollars to its investors. As government authorities investigated Stanford's business, members of his inner circle provided detailed information outlining decades of fraud within the organization.

Jim Davis, SIB's chief financial officer, stated that the company's fraudulent practices stretched all the way back to the earliest days of the Guardian bank on Montserrat. Davis stated that he and Stanford actively misrepresented the financial picture of their company when inducing investors to purchase their CDs. Contrary to the company's marketing materials regarding secure, conservative investments, a substantial portion of investor funds were actually appropriated by Stanford himself, who used them to finance his personal business ventures and opulent lifestyle. Working together, Stanford and Davis manipulated annual reports to show fake profit numbers to investors. In fact, Stanford sat atop a massive Ponzi scheme, using the funds from recent CD sales to pay investors holding matured certificates.¹

Stanford also used investor funds to solidify his political position in Antigua, making loans to the government and paying bribes to its financial regulator, Leroy King. Antigua, in return, granted Stanford the title of “Sir Allen Stanford.” Over a period of 16 years, Stanford employed a single Antiguan auditor to falsely certify the bank's financial records. Stanford's corruption of Antiguan officials also allowed him to impede SEC scrutiny of his organization, as King shared confidential SEC communications with him regarding potential investigative activities.

By 2008, Stanford was bilking approximately $1 million dollars per day from investors to finance his personal endeavors while simultaneously providing false assurances regarding the strength and solvency of the organization. Stanford's bank's inability to repay its investors in late 2008 and early 2009 promptly led to the collapse and exposure of his fraudulent financial empire.

Prosecutors filed the original indictment on June 18, 2009. In September 2009, Stanford was beaten by other inmates in the detention facility, sustaining severe injuries. He was subsequently deemed incompetent to stand trial and was admitted to a medical center for treatment and evaluation. While Stanford was in the treatment facility, prosecutors filed a superseding indictment on May 4, 2011. Stanford completed his treatment in November and the district court deemed him competent after a hearing in late December. Following a seven-week trial, a jury convicted Stanford on 13 of 14 counts and the district court sentenced him to 110 years in prison. He now appeals pro se.

DISCUSSION

I. Objection to jurisdiction

Stanford first asserts that the SEC did not have regulatory authority over SIB, which is an offshore institution located on the island of Antigua. This assertion forms the basis for Stanford's claim that the district court lacked jurisdiction over the criminal case against him. We review jurisdictional questions de novo. United States v. Traxler, 764 F.3d 486, 488 (5th Cir.2014).

It is unnecessary to determine whether the SEC had regulatory authority over SIB, as neither the SEC nor SIB are parties to this criminal case. The district court had jurisdiction over Stanford's case pursuant to 18 U.S.C. § 3231. Stanford does not offer any reason why the district court would not have jurisdiction over him personally for the various federal criminal offenses with which he was charged. As a result, his objection fails.

II. Sufficiency of the Indictment

Stanford alleges several defects in the superseding indictment, raising these issues for the first time on appeal. Where a defendant raises new challenges to the sufficiency of the indictment on appeal, we review for plain error. United States v. Fuchs, 467 F.3d 889, 900 (5th Cir.2006). First, Stanford states that the “[d]ates charged for the alleged fraudulent scheme in all Counts of the Indictment was [sic] not supported by the dates admitted in open court by the Government,” resulting in a “constructive amendment”² of the indictment at trial. We disagree.

A constructive amendment occurs when the government changes its theory at trial, allowing the jury to convict on a broader basis than that alleged in the indictment, or when the government proves an essential element of the crime on an alternate basis authorized by the statute but not charged in the indictment. United States v. Girod, 646 F.3d 304, 316 (5th Cir.2011). An allegation as to the time of the offense is not an essential element. Id. Here, the fourteen counts of the superseding indictment alleged offenses between “in or about 1990” and “in or about February 2010.” Where the prosecution uses the “on or about” designation, the indictment is sufficient “if a date reasonably near is established.” United States v. Valdez, 453 F.3d 252, 260 (5th Cir.2006). The indictment notified Stanford of the precise nature and timeframe of each conspiracy and provided specific descriptions of the overt acts that furthered each conspiracy. Furthermore, counts two through six—relating to wire fraud—and counts seven through eleven—relating to mail fraud—alleged the approximate actual dates on which the offenses occurred and provided a contextual description of each illegal transaction. Matching documentary evidence proved these transactions at trial. The combination of approximate dates and specific contextual information for each allegation provided sufficient notice to Stanford, who has not demonstrated that he was “surprised or prejudiced in any way” by the dates in the indictment. See Girod, 646 F.3d at 317.

Next, Stanford asserts that a “constructive amendment” occurred with respect to count four (wire fraud) when the government introduced evidence at trial confirming that the transaction in question involved a transfer of $700,000 of investor funds from Houston, Texas, to an SIB account in Canada, inconsistent with count four's particularized description of a Houston–to–Houston transfer.³ Stanford did not raise this argument during trial. Thus, we review the issue for plain error. See United States v. Scher, 601 F.3d 408, 411 (5th Cir.2010). On plain-error review, we will reverse only if “(1) there is an error, (2) that is clear or obvious, and (3) that affects [the defendant's] substantial rights.” United States v. Ferguson, 211...