The Libyan government invested $500 million of its cash reserves with the accused swindler Allen Stan-ford's firm as of late 2008, a court filing showed yesterday.

Stanford and his girlfriend Andrea Stoelker flew to the Libyan capital of Tripoli on Jan 25 this year because the Libya government was inter-in increasing the amount it had invested with him, court documents confirmed.

Stanford met with several officials, including Mohamed Layas, chief executive officer of the Libyan Investment AuthorityLibyan Investment Authority, the filing revealed. It was not clear whether the investment was recouped before the US government shuttered Stanford's network of financial firms.

US prosecutors cited the 2009 trip to Libya at a deten-tion hearing before a federal judge in Houston on June 29 as evidence that Stanford was a flight risk, but Stanford's attorney said it was a regular business trip.

The Texas financier, who will faces criminal and civil char-ges related to a $7 billion fraud, was ordered by US District Judge David Hittner to remain in custody until his trial last week.

Dick DeGuerin, Stanford's lawyer, is fighting that order and asked the judge to recon-sider it.

Federal prosecutors had argued that Stanford would not stick around for his trial, citing, among other factors, the billionaire's residence outside the US, frequent trips on his private jet, a missing but expired passport and a global network of contacts.

The passport turned up, however, after the detention hearing. It had been seized along with Stanford's other possessions by a receiver, prosecutors said in a court filing last week.

"The government's lack of candor regarding the expired passport is egregious," DeGuerin said in the filing. "The government repeatedly claimed no knowledge of the whereabouts of Mr Stanford's expired Antiguan diplomatic passport, despite the fact that the passport had been in the possession of the receiver."

That alone is grounds for reversal of the detention order, the court filing said.

DeGuerin has said that he plans to appeal Hittner's decision to the Circuit Court of Appeals in New Orleans.

The government has accused Stanford and others of oper-ating a "massive" Ponzi scheme with client funds from certificates of deposit issued by the firm's offshore bank in Antigua.

To cover their tracks, pros-ecutors have said Stanford falsified accounting docu-ments and also bribed the Antigua bank regulator. Stanford has pleaded not guilty to the charges.

© 7Days 2009

 

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