Former administrator of the Financial Services Regulatory Commission (FSRC) Leroy King leaves the court, Monday, after Chief Magistrate Ivan Walters ordered his committal for extradition on allegations of fraud related to R Allen Stanford’s alleged US$8 billion ponzi scheme. King, who was on bail since his arrest in June last year, underwent surgery on his right eye. To King’s left is a senior police officer. (Photo by Julian Rogers)
Almost 10 months after he was arrested on several fraud-related charges in connection with an alleged US $8 billion ponzi scheme perpetrated by R Allen Stanford, and after several adjournments, Chief Magistrate Ivan Walters ordered the committal for extradition of Leroy King, former chief executive officer of the Financial Services Regulatory Commission (FSRC).
Minister of External Affairs Baldwin Spencer has to approve the decision that will allow the one-time FSRC boss to be returned to the United States to answer the charges in a court of law.
Meanwhile, the court informed the accused that he has 15 days to exercise his right to file a writ of habeas corpus seeking to set aside the magistrate’s ruling. Reliable reports are that the writ has already been drafted. Should the application be filed, the matter could be tied up in the courts for months to come.
The highly anticipated court decision on the extradition request made by the US last year was delivered yesterday in the St John’s Magistrates’ Court in the presence of King’s relatives and friends.
Following his decision, Magistrate Walters ordered King remanded to Her Majesty’s Prison to await the decision. However, the magistrate later granted King bail under section 11(9) and (7) of the Extradition Act upon application by King’s lawyer, Queen’s Counsel Dane Hamilton, with no objections coming from the Director of Public Prosecutions (DPP) Anthony Armstrong who had conduct of the extradition request.
Hamilton made the bail application on medical grounds.
The lawyer told the adjudicator that King, who appeared in court yesterday with a bandage over his right eye, underwent surgery on Saturday April 24 to reattach the retina in his right eye and the ophthalmologist, Dr Ian Walwyn, who performed the surgery recommended that he return for regular treatment and remain in a safe, clean, healthy and secure environment, among other stipulations.
The attorney submitted medical reports in support of information that King’s surgery to the eye, without proper follow-up care, would result in blindness.
He further gave the court additional documents, from different doctors, in support of other medical conditions, which place restriction on physical activities.
In light of the application, Magistrate Walters said bail would be extended to the accused but instead of the $500,000 with a $100,000 cash requirement which King was granted on his first appearance in court last June, the magistrate increased the amount.
Now, King’s bail is $600,000, making it necessary for an additional $10,000 cash deposit to be paid to the court before he was released.
The court also asked for a copy of the title deed to the property that King’s surety said was valued at $200,000 and further asked that a caution be placed on said property.
The other bail conditions previously ordered remain the same.
The accused must continue to report to the St John’s Police Station twice daily and must not leave his home unless accompanied by one of his two sureties except in the case of a medical emergency. His travel documents will remain in police custody.
Before he made his decision on the bail application known, Magistrate Walters noted that King’s co-accused, some of whom also have medical conditions, are all in jail in the US awaiting trial.
He however stated that he is cognisant of the conditions of the local prison where the cells are overcrowded and conditions not conducive to the type of medical care King would require.
King, who was also the FSRC administrator, is accused of 10 counts of conspiracy to commit mail fraud, seven counts of conspiracy to commit wire fraud, conspiracy to commit money laundering and conspiracy to obstruct the SEC as an accomplice to Allen Stanford’s alleged crimes.
The complaint accuses King of conducting sham audits and examinations of Stanford International Bank (SIBL), an offshore bank located in Antigua, in exchange for large sums of money and other bribes while he allegedly made sure that the SEC did not peruse the offshore bank’s investment records.
The DPP had submitted that King had sought advice from Stanford’s lawyers on what to say in response to inquiries being made by the Eastern Caribbean Central Bank (ECCB) as the investigation into the alleged scheme got under way.
Armstrong said that King prepared letters in his handwriting, addressed to one Nigel Streete, bearing the fax number for Maurice Alvarado the general legal counsel for Stanford Financial Company (SFC), seeking advice on matters raised by the ECCB concerning the supervision of SIBL, Stanford Trust Company Limited (STCL) and other affiliate companies.
Armstrong said the nature of the correspondence shows that there was more than a “good friend” relationship between the SFC counsel and King.
In the letter King allegedly wrote, “To America’s best and greatest attorney, Mr MA, I am sending you two versions. One short, one with a little more knock-out punch. I prefer the shorter version; a little more subtle and diplomatic.”
Armstrong told the court that King had written to the SEC stating that the FSRC had concluded that “any further investigation of ‘possible’ fraudulent activity of SIBL is unwarranted. The FSRC is very concerned as to why the SEC would impute such serious allegations against SIBL. It is the opinion of the FSRC the SIBL has conducted its banking business to date in a manner the FSRC considers to be fully compliant.”
The DPP submitted that the correspondence shows that the accused knew of and facilitated the ponzi scheme.
In a second letter, said to be in King’s handwriting, he wrote, “I would like to include but it does not seem to flow well with the above. Don’t want to over-kill or seem too arrogant. Any other ideas? Must conclude tomorrow. Will send package to include a copy of the annual reports for SIBL and STCL. I am sending a message to these guys that institutions concerned are not run of the mill, they are great quality institutions and the numbers speak for themselves. Thanks a million. Lee.”
The DPP said that the letter, statements from James Davis, the former chief financial officer of SFC, as well as substantive independent data are corroborative that King supported the scheme.
Davis is also an accused in the matter and he has pleaded guilty.
The court had heard that between February 2, 2005 and February 2, 2009 there had been quite a number of cash deposits made to one of King’s two accounts at JP Morgan Chase whilst similar deposits were made into the other account between January 9, 2003 and February 4, 2009.
The prosecutor had also said that evidence obtained from an independent auditor into SIBL’s financial statements showed that the investments the company alleged to have made, did not exist or were grossly inaccurate having been overstated.
However, Armstrong said that King reported to SEC officials that the offshore bank was solvent and a good quality institution which was fully compliant with the requisite offshore banking regulations.”
In response, Hamilton QC had argued that while King is accused of making false assurances that there was no cause for concern about SIBL and collaborating with Stanford to withhold significant information requested by the SEC, that could not be so because King was never the supervisor of banking and therefore could not influence the proper or improper examination of SIBL’s books.
Further, the Queen’s Counsel stated that King’s alleged refusal to divulge information was not a crime, his actions were in fact “within the four corners of the law.”
Hamilton also said that the statements given by the accused Davis are incapable of establishing that King was involved or that he took part in “the ludicrous blood oath ceremony” for the stated purpose, or that he received bribe money from Stanford to obstruct the SEC investigation. The Queen’s Counsel had made several other submissions, as did the DPP.
Under the Extradition Act, persons can only be extradited following a bilateral agreement for crimes which carry a penalty exceeding 12 months in prison.
King is the second person whose extradition to the United States has been ordered this year. Last week Newfield resident Gordon Weston was taken to the United States on allegations he attempted to murder Earl Matthias, among other related offences committed some five years ago