Stanford Sentencing Today: U.S. Seeking 230 Year Prison Sentence, $5.9 Billion in Restitution

"The nature and circumstances of Stanford's fraud, his own role and personal history, and the need for forceful deterrence calls for the most severe punishment permitted by law."

- Stanford Prosecutors

Convicted swindler Allen Stanford is scheduled to be sentenced today in what will rank as the second-largest financial crime in history, behind only Bernard Madoff's $65 billion Ponzi scheme.  Following a trial where he was convicted on thirteen of fourteen counts, the Department of Justice has asked for a 230-year prison sentence - the maximum term for each count.  If followed by the Judge, the sentence would eclipse even that of Madoff, who received a 150-year sentence for his scheme.  Additionally, the US filed papers with a Houston federal court on Tuesday seeking an order of $5.9 billion in restitution - a move that is likely symbolic given the government's previous acknowledgement that restitution would be impractical due to its complexity, Stanford's claim of indigency and the difficulties encountered thus far by the court-appointed receiver overseeing the gathering and liquidation of Stanford's assets.

On the eve of the sentencing, Stanford's attorneys filed papers accusing the government of sensationalizing Stanford's plight, with court-appointed attorney Ali Fazel arguing that

"Although Ponzi scheme makes for a great sound bite and may help defer the fact that the Government has missed, on all cylinders, uncovering the shenanigans of the banks and other financial institutions in 2008 and 2009, it simply does not describe what Stanford was or what Stanford did,"

In a move that may not bode well for Stanford, Fazel continued to dispute that Stanford had orchestrated a Ponzi scheme, noting that unlike a Ponzi scheme where customers receive fictitious returns from little or no real investments, Stanford "made investments in real estate, private equity; he invested and created foreign banks, foreign and domestic investment companies and airlines."  United States Judge David Hittner, who will ultimately decide the appropriate sentence for Stanford, is likely to consider Stanford's remorse and acceptance of responsibility for his crime as a factor in handing down a sentence.  Stanford's continued denial of guilt could potentially be a death sentence in itself if it causes Judge Hittner to inflate Stanford's sentence.  According to Scott Cohn at CNBC, Stanford does plan to make a statement in open court, as is customarily afforded to defendants before they are sentenced.  It is also likely that Judge Hittner will hear from Stanford victims who wish to share their plight with the Court, both by written letter and by open testimony. 

Stanford's lawyers have countered with a request for a prison term of 31 to 44 months, which could result in the immediate release of Stanford given his current period of incarceration before trial and customary good-behavior reductions given by the Bureau of Prisons. 

In seeking $5.9 billion in restitution, U.S. Attorney Kenneth Magidson called the figure "conservative", noting that it derived from the simple subtraction of $1.3 billion in fictitious interest from the $7.2 billion in account balances at the time Stanford's empire was placed into receivership in February 2009.  Magidson cited the incomplete nature of Stanford's financial records as one of the reasons for the figure - echoing previous speculation that court-appointed receiver Ralph Janvey was having trouble piecing together investor losses after the Proof of Claim Form distributed to potential victims included a section requiring victims to provide documentation supporting their loss figures.

Sentencing is scheduled to begin at 10:00 A.M.