Witness says IRS didn’t oppose Stanford loans

The Internal Revenue Service knew R. Allen Stanford was taking loans from his Antigua bank and found nothing wrong with the arrangement, the Texas tycoon’s tax lawyer testified Tuesday as Stanford’s fraud trial resumed for its fifth week, The Houston Chronicle reports. “The IRS always treated those as loans to Mr. Stanford,” said Larry Campagna, who represented Stanford in personal and business tax disputes with the IRS in 1998 and again in 2003. The IRS did change its position, however, about the correct way to characterize payments from Stanford to his Houston-based Stanford Financial Group, the parent company of Stanford’s scores of business operations. He was sole owner of Stanford Financial and its subsidiaries. Although the tax agency ruled that those should be listed as loans on 1998 tax returns, it said the payments should be recorded on 2001 and 2002 returns as dividend payments to Stanford, Campagna said. Defense attorney Robert Scardino asked Campagna if anything about the returns prompted the IRS to ask criminal investigators to initiate a fraud probe. “No,” Campagna said, before he was dismissed from the witness stand. Stanford is accused of leading a $7 billion Ponzi scheme and faces a litany of stemming charges, all of which he denies. Read the full story here.