Sir Allen Stanford, alleged head of a $7 billion Ponzi scheme, will not be allowed to use a $100 million insurance policy to pay for his defense against the charges, Bloomberg reports.
A Houston federal judge said that Stanford probably laundered money, and (this is a little surprising) he should have told his insurance company and regulators about the laundering. Apparently failure to tell your insurance company you’re doing something illegal is grounds to void your policy. The insurer, Lloyd’s of London, had previously agreed to make the payout … until Stanford’s CFO pleaded guilty to mail fraud, obstruction and securities fraud.
Poor Allen Stanford. It must be awful to put money into something in hopes that it’ll pay off in the future, only to find out all those squirreled-away dollars are worthless.