Allen Stanford 'ponzi' trial begins in Texas

Financier Allen Stanford is to stand trial in Houston on Monday charged with masterminding a $7bn 'Ponzi' scheme in which more than 20,000 people were lured by the promise of high returns.

Stanford, 61, is accused of misleading investors about certificates of deposit (CDs) issued by his offshore bank, Stanford International Bank.

The CDs were touted as safe, with funds "generally invested in investment grade bonds, securities and foreign currency deposit".

Instead, prosecutors allege, Stanford invested CD proceeds in illiquid investments that included Caribbean real estate, a Cowboys and Indians magazine and a pawn shop operator. He also loaned more than $2bn to himself.

The Texas courts have turned down claims that Stanford is not fit to stand trial following brain injuries caused by a fight with an inmate in 2009.

He has been in prison without bail since he was arrested nearly three years ago.