A federal judge in the U.S has ruled that Lloyd’s of London is not liable for the US$20 million in legal fees that are likely to be incurred by Robert Allen Stanford’s defence team because there is a substantial liklihood of money laundering. Stanford was covered by a director’s insurance policy purchased by his Texas-based companies that was underwritten by Lloyd’s. The policy contained an exclusion for money laundering charges.
Although Stanford’s trial has not yet started, Lloyd’s resisted continuing to pay for Stanford’s legal fees on the basis that there was sufficient evidence of money laundering. Thus far, Lloyd’s has paid US$8 million for Stanford’s defence. Stanford was indicted in June 2009 with four other individuals, on charges of conspiracy to commit mail fraud, mail fraud, securities fraud, wire fraud, obstruction of an investigation and conspiracy to commit money laundering. He is accused of running a billion dollar Ponzi scheme that allegedly defrauded hundreds of investors in the U.S. Download Stanford Indictment or Download Stanford SEC Complaint.