Indicted financier R. Allen Stanford was sued by a unit of American Express Co. for $115,712.79 in back credit card debt.
Indicted financier R. Allen Stanford was sued by a unit of American Express Co. for $115,712.79 in back credit card debt.
Stanford, who faces 21 criminal charges that he led a $7 billion Ponzi scheme, has been incarcerated since June. American Express Centurion Bank said its lawsuit could be served on Stanford at the federal detention center in downtown Houston.
“Defendant benefited from all of the charges made to the Centurion Card account, has acknowledged receipt of those benefits, and has failed to pay for same,” Donald D. DeGrasse, American Express's lawyer, said in papers filed in Texas state court in Houston yesterday.
Stanford was sued in February 2009 by the U.S. Securities and Exchange Commission on allegations he swindled investors through a scheme built on fraudulent certificates of deposit at Antigua-based Stanford International Bank Ltd. The judge overseeing that case froze all of Stanford's personal and corporate assets and placed them under the control of court- appointed receiver Ralph Janvey.
DeGrasse, in a telephone interview, said he also plans to file American Express's claim with the receivership, which is marshalling Stanford's assets to repay investors and creditors. American Express's suit also asks that Stanford pay $34,000 to cover the bank's anticipated legal fees in the bad debt matter.
The government accuses Stanford of misrepresenting the nature and oversight of investor deposits in his offshore bank. Prosecutors claim the financier siphoned off as much as $1.6 billion to fund a lavish lifestyle of mansions, yachts, airplanes and a private Caribbean island.
Stanford denies any wrongdoing in connection with the allegations. His criminal trial is set for January 2011.
Kent Schaffer, Stanford's criminal defense attorney, declined to comment on the lawsuit. Janvey's spokeswoman, Kristie Blumenschein, didn't immediately return calls or e-mails after regular business hours seeking comment on the matter.
The case is American Express Centurion Bank v. Stanford, 2010-20554, 234 Judicial District, District Court of Harris County, Texas (Houston).
The civil case is SEC v. Stanford International Bank, 3:09- cv-00298, U.S. District Court, Northern District of Texas (Dallas). The criminal case is U.S. v. Stanford, 4:09-cr-00342, U.S. District Court, Southern District of Texas (Houston).
