Stanford indicted in massive U.S. fraud case

By Tabassum Zakaria

RICHMOND, Virginia (Reuters) - Texas billionaire Allen Stanford, three associates and a top Caribbean regulator were indicted on fraud, conspiracy and obstruction charges in an elaborate $7 billion pyramid scheme to bilk investors, U.S. Justice Department officials said on Friday.

A federal judge in Virginia ordered Stanford, a flamboyant 59-year-old financier, to be transferred to Houston for a hearing on whether he should be granted bail on charges he orchestrated the fraud through his bank on the Caribbean island of Antigua.

He could face life in prison if convicted on all of the charges brought by a grand jury in Texas, assistant Attorney General Lanny Breuer told reporters in Washington.

Stanford, who surrendered to FBI agents outside his girlfriend's house in Virginia late on Thursday, entered a Richmond federal courtroom in ankle shackles and sat straight with his chin in his hands during a brief hearing before U.S. Magistrate Hannah Lauck.

"To go to Texas, yes ma'am,'" he said when Lauck asked if he preferred to have his bail hearing in Houston or Virginia. Stanford, who has a mustache and salt-and-pepper hair, was dressed in a white shirt and dark pants.

Stanford and executive Laura Pendergest-Holt, accountants Gilberto Lopez and Mark Kuhrt and Antigua's top regulator, Leroy King, were hit with 21 charges alleging they concocted a broad ruse to deceive investors, fabricate financial statements and hide their fraud.

"This scheme was carefully orchestrated to make sure the true information never saw the light of day," said Robert Khuzami, head of the Securities and Exchange Commission's enforcement unit.

Stanford, who lived lavishly and whose passion for cricket translated into generous backing for the sport in the cricket-loving West Indies, has denied any wrongdoing. His lawyer said on Friday the financier would fight the allegations.