Investors sue auditor for Stanford fraud

Investors defrauded by R. Allen Stanford’s $7 billion Ponzi scheme say in court filings that the fund’s auditor knowingly participated in the fraud. As Courthouse News Service reports, the Official Stanford Investors Committee has filed a federal complaint against BDO USA, as well as its related entities BDO International, BDO Global Coordination and Brussels Worldwide Services. The complaint abbreviates Stanford Group Co. as SGC. “Despite the pervasive fraud that infected Stanford Financial Group’s operations, BDO USA repeatedly issued unqualified audit opinions on its Stanford clients’ annual financial statements,” the complaint states. “BDO USA’s audit opinions on (Stanford Group Company’s) financial statements were critical to Stanford Financial Group’s success.” In March, Stanford was found guilty of one count of conspiracy to commit mail fraud, four counts of wire fraud, five counts of mail fraud, one count of conspiracy to obstruct a U.S. Securities and Exchange Commission investigation, and one count of obstruction of an SEC proceeding. He was acquitted of one wire fraud charge, and has yet to be sentenced. The investors are seeking actual and punitive damages for negligence, civil conspiracy, breach of fiduciary duty, fraud and conversion. They are represented by Guy Hohmann with Hohmann, Taube & Summers in Austin. Read the full story here.