Indictments Bring Some Relief

Texas billionaire R. Allen Stanford has been indicted for what prosecutors say is a 7-billion dollar scheme to defraud investors. Also indicted were three executives of Houston based Stanford Financial group and a former bank regulator in Antigua. The indictments bring several questions: Will it bring relief to investors and will it lead to legal action in similar cases? Pat Hernandez has more.

The indictments allege wire fraud, mail fraud, obstruction of justice and conspiracy to launder billions in investors' money. Adam Gershowitz teaches criminal law and procedure at the South Texas College of Law. He says the government's case is just beginning.

"Usually the Department of Justice doesn't proceed to indictment unless they have very particular evidence. That of course, doesn't mean that they have an open and shut case. A lot of times they move forward with an indictment as a way to pressure other witnesses to sort of fill out the rest of their case. It may be that they're not completely set yet, and they're still working through all the evidence."

The indictment is the preliminary process for the government to explain what happened to the life savings of thousands of investors, like Cindy Dore of Houston.

"I just couldn't believe it. I was in a state of disbelief, because we trusted the American system and felt like the regulators were regulating, and we were just horrified. I couldn't sleep for two weeks. It was just devastating."

She considers herself luckier than other investors.

"There are people their homes, there are people that I have heard of here in Houston who are so devastated by this, that they're in and out of the hospital. The stress is creating all kinds of illnesses. It's just really hard for me to think about Allen Stanford, when we have this type of devastation facing us."

Attorney Michael Tate Barkley is a professor at the University of Houston School of Communications.

"I believe it to be a public policy goal of the Obama Administration to demonstrate, to not only the public, but to demonstrate to the community at large, that people that have unethical practices, will be prosecuted and they will be punished, and that they view that as a way to restore  some confidence in the system."

Attorney Lori Whisenant teaches ethics at the Bauer College of Business at the University of Houston. She says the case against Stanford provides an excellent exercise for her students.

"One of the things that we have to do is to help students learn tools to be able to recognize when an ethical dilemma exists, because I think a lot of people are in situations where they're making decisions, and they might not realize that this is potentially a conflict of interest so, we need to be able to first figure out if there is an ethical dilemma, and then from there, how do we make this decision. What tools are in place and where do I need to look."

Whisenant calls the case good for her as a teacher, but disheartening to the victims.

Pat Hernandez, KUHF Houston Public Radio News.
 

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Pat Hernandez

Reporter

Pat Hernandez is a general assignments reporter who joined the KUHF news staff in February of 2008...