Back in May 2009, FT Alphaville reported that the US Securities and Exchange Commission was investigating whether Sir Allen Stanford, the Texan billionaire accused of operating a $7bn Ponzi scheme, had violated the terms of the freeze on his assets.

As for how he might have violated the freeze, the SEC said Sir Allen “wrote a series of checks to the Bellagio Hotel & Casino in the aggregate amount of $258,480.” Moreover:
All of these checks were dated February 19, 2009 (two days after entry of the asset freeze), signed by Stanford, and honored on or about February 24th or 25th

At the time, Sir Allen’s lawyer Dick DeGuerin, disputed the claim. In an email sent to the Houston Chronicle, Mr DeGuerin said he had copies of the documents, and that they were not checks but markers:

I now have copies of the Bellagio “checks”, which are actually “markers” Allen Stanford signed when he and Andrea were staying at The Bellagio in January, before the SEC filed its destructive action in Dallas and obtained the freeze (and caused the predictable run on the banks)

The casino put the later dates on the markers, which are like counter checks, when the casino sent them for collection to the Mellon Bank account (personal) Stanford had in Miami. If this is the kind of investigation and legal work the receiver is spending fifteen million (so far) for the investors should be furious at this squandering of assets. Once I had the copies of the “checks” it took me a five minute ‘phone call to the Bellagio (casino collections department) to get it explained

What Mr DeGuerin did not explain was why the Bellagio would have post-dated the markers.

In any event, the Bellagio has now filed suit against Sir Allen, as the Las Vegas Sun reported on Tuesday:

The Bellagio resort on the Las Vegas Strip sued Stanford in Clark County District Court in Las Vegas on Tuesday, claiming he owes $258,480 in unpaid gambling markers.

…

The luxury Bellagio resort, owned by hotel-casino company MGM Mirage, said in its lawsuit that Stanford signed for 14 gambling markers between Jan. 15 and Jan. 22.

The check-like markers, known as credit instruments evidencing a gambling debt under Nevada law, were presented for payment to Mellon United Nat’l Bank in Miami on Feb. 19, the lawsuit said.

The lawsuit says all 14 checks were returned unpaid and were marked SIGM (signature not like on file) or RTM (return to maker). The checks ranged in amount from $3,480 to $40,000.

“Defendant is indebted to plaintiff for a gaming debt evidenced by such credit instruments,” the lawsuit says

The suit seeks payment of the $258,480 plus interest at the rate of 18 percent per year and attorney’s fees.

Blood oaths, gambling debts – we almost don’t want to know what other skeletons lurk in Sir Allen’s (presumably oak-panelled) closets.

For the record, the businessman has denied all the charges against him.

This entry was posted by Stacy-Marie Ishmael on Wednesday, September 2nd, 2009 at 16:45 and is filed under Capital markets, People. Edit this entry.