At Last we may see some justice………….
By Murray Waas May 22 2014
A private security guard blocks entrance to a branch of the Bank of Antigua in February 2009, after Antigua’s prime minister, Baldwin Spencer, urged people not to panic over a US fraud probe involving Texas billionaire R. Allen Stanford. Photo via Getty Images
The former most senior banking regulator of the Caribbean island nation of Antigua, Leroy King—who was indicted in the US in June 2009 for taking bribes to turn a blind eye to and cover up since-jailed Houston financier R. Allen Stanford’s $7 billion Ponzi scheme—has recently had preliminary discussions with US authorities about accepting a plea agreement in the case, according to people familiar with the matter.
King may be able to provide heretofore unknown but crucial new information about the role of two former Securities and Exchange Commission attorneys, Thomas Sjoblom and Spencer C. Barasch, who after their time at the SEC represented Stanford as private attorneys before the agency, according to the aforementioned sources. King allegedly falsified certified reports in Antigua that Stanford’s bank was solvent and sent phony audits to the SEC to deceive US regulatory authorities.
Besides turning a blind eye to the Ponzi scheme that Stanford masterminded via his offshore bank in Antigua, King allegedly tipped off Stanford on occasions when the SEC sought information from Antiguan authorities about Stanford’s financial activities in the island nation. On two occasions, according to allegations made in federal court by the United States Department of Justice in September 2009, King allegedly provided Stanford with confidential letters that the SEC had previously sent to King in an attempt to investigate Stanford International Bank’s business in Antigua.
A confidential federal law enforcement memo suggests that there is strong circumstantial evidence that Sjoblom—and to a lesser extent Barasch—were aware of the arrangement whereby King provided them with the sensitive inside information from inside the SEC. The same memo indicates that investigators were also said to be interested in whether Sjoblom or Barasch knowingly exploited inside information in their legal defense of Stanford before the SEC. Both Barasch and Sjoblom declined to comment for this story.
In June 2009, King, the administrator and chief executive officer of Antigua’s Financial Services Regulatory Commission, was indicted by the Justice Department on charges of accepting bribes to protect the Stanford Ponzi scheme and supply Stanford with confidential information about the SEC’s investigation. Stanford paid the bribes, in part by depositing money for King regularly in a Swiss bank account, according to the indictment of King.
One of the former SEC officials, Thomas Sjoblom, was previously investigated by the US Department of Justice in relation to his private legal work for Stanford. Two former top aides to Stanford, who pled guilty and became government witnesses against Stanford and others, alleged to federal authorities that Sjoblom had suborned the perjury of one of them to help Stanford conceal his Ponzi scheme, the Justice Department claimed in papers filed in federal court in Houston.
As I first reported for Reuters in 2010, the Justice Department investigated Sjoblom for obstruction of justice, witness tampering, and conspiracy. They even considered charging him with these offenses. Extraordinarily, Sjoblom offered to testify against Stanford—his own client—if Sjoblom was not charged himself.
Quoting from my piece for Reuters:
People with firsthand knowledge of the matter say that Sjoblom had offered the Justice Department his testimony against Stanford in exchange for a grant of immunity from prosecution for himself—an offer rejected by the Justice Department. Prosecutors demanded a formal acknowledgment by Sjob
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