The US government is asking a judge for permission to go after at least $226.6m (€174.4m) in back taxes, penalties and interest it says are owed by Sir Allen Stanford, the Texas billionaire accused of conducting an €6.1bn investment fraud through an offshore bank.
The Internal Revenue Service tax agency filed a request on Friday with US District Judge David Godbey in Dallas to also order Stanford to file his income tax return for 2007 by April 15.
The cricket mogul and his wife Susan may owe taxes in addition to the €174.4m for 1999-2003, the IRS said in a court filing.
Stanford was charged with fraud last month by the Securities and Exchange Commission in a civil proceeding. He has been ordered to surrender his passport but has not been charged with a crime.
The IRS filed four tax liens against Stanford in 2007 and 2008. In August, the Stanfords requested a due-process hearing by the IRS’ Office of Appeals to contest a lien filed in July for tax years 2002 and 2003 and a notice of intent to collect back taxes, the IRS said in its court filing.
The IRS said the Stanfords had also contested the validity of what it says are their tax liabilities for those two years.
Stanford’s personal fortune has been estimated at €1.73bn by Forbes magazine. His assets were frozen and put into receivership after the SEC lodged its civil complaint against him on February 17.
In an amended complaint filed on February 27, the agency accused Stanford and his finance chief James Davis of conducting a “massive Ponzi scheme” through companies they controlled, including Antigua-based Stanford International Bank.
In a Ponzi scheme, early investors are paid returns from money put in by later investors.
A lawyer representing Stanford said his client denied the allegations made by the SEC.
In addition to the bank, which sold the certificates of deposit the SEC alleges promised unrealistically high rates of return, Stanford’s businesses in Antigua include a newspaper, restaurants, a development company and the Stanford cricket grounds. He also owns private jets.
The Stanfords are currently in divorce proceedings in Texas. They jointly own homes in Antigua, Texas, Florida and the US Virgin Islands, according to court filings.
Stanford and Davis have invoked their constitutional right against self-incrimination and refused to testify or provide documents in the SEC’s case against them.
The chief investment officer of Stanford’s parent company, Laura Pendergest-Holt, faces criminal charges of obstructing the SEC’s investigation by lying about her knowledge of the firm’s activities and omitting key details. Her lawyer has said she was “set up” by Stanford and Davis.
Judge Godbey last week approved a request from the court-appointed receiver that could release more than €3.24bn in previously frozen funds to Stanford investors.
A group of Stanford investors from the US and other countries announced yesterday they had formed the Stanford Victims Coalition, to “provide a unified voice to fight for the recovery of the billions of dollars we invested in Stanford International Bank’s certificates of deposit”.
“So many of these investors put their entire life savings in these alleged fraudulent CDs and face tremendous hardship if their money is not returned,” the group said in a statement.
“Many are senior citizens who face having no means of survival. Others are disabled or widowed.”