Stanford suing SEC, prosecutors for $7.2 billion (Reuters)

HOUSTON (Reuters) – Jailed financier Allen Stanford, accused of running a massive Ponzi scheme, filed a $7.2 billion lawsuit accusing federal prosecutors and regulators of depriving him of his constitutional rights.

The government agents "undertook illegal tactics" to prosecute Stanford and "engaged in unfair, abusive law enforcement methods and tactics" that left him broke and unable to properly defend himself, according to the lawsuit filed in federal court in Houston late on Wednesday.

The lawsuit seeking return of his assets comes two years after the U.S. Securities and Exchange Commission filed civil charges against the former jet-setting Texas financier.

Stanford is accused of running a $7 billion Ponzi scheme centered on fraudulent certificates of deposit issued by Stanford International Bank in Antigua. He has pleaded not guilty to all charges in a 21-count indictment.

"Mr. Stanford was literally left with only the suit he was wearing at the time of the SEC Agents and U.S. Marshals seizure of property ..." the lawsuit said.

A spokeswoman for the U.S. Attorney in Houston declined to comment on the lawsuit, as did a spokesman for the U.S. Securities and Exchange Commission.

U.S. District Judge David Hittner, who ruled that Stanford is incompetent to stand trial in his current mental state, has also declared the former billionaire indigent.

Stanford, 60, is in the process of being transferred to a prison hospital for treatment of addiction to a powerful anti-anxiety medication he was prescribed while jailed.

The Bureau of Prisons website lists his current location as a federal transfer center in Oklahoma.

He may end up at a U.S. prison hospital in Butner, North Carolina. That is the same federal facility where Bernie Madoff is serving a 150-year sentence for conducting the largest financial fraud in history.

The case is R. Allen Stanford v Stephen Korotosh et al, U.S. District Court for the Southern District of Texas, No. 11-00582.

(Reporting by Anna Driver, editing by Gerald E. McCormick)

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Prosecutors move for Berlusconi trial

Prime Minister Silvio Berlusconi has been tried on at least 17 charges since first taking office as prime minister in 1994.NEW: The allegations "throw mud on the government, country and on me," Berlusconi saysAuthorities seek to prosecute him for alleged sex with an underage prostitute, abuse of powerProsecutors want a judge to approve a fast-track trial of Italy's prime ministerThe judge has five days to decide what to do
Rome (CNN) -- Italian prosecutors Wednesday formally requested a fast-track trial of Prime Minister Silvio Berlusconi for alleged abuse of power and sex with an underage prostitute, they said.
Judge Cristina di Censo has five days to make a decision on how to proceed now that Milan chief prosecutor Edmundo Bruti Liberati has filed the application.
She can accept the request, putting the fast-track trial in motion; or dismiss it, allowing investigations to continue to determine whether there is enough evidence for trial.
She could also refer the case to another court. Berlusconi's lawyers have argued that the Milan courts do not have jurisdiction -- because of where the alleged crimes were committed -- or the authority to try a prime minister.
Prosecutors are investigating claims that Berlusconi paid for sex with nightclub dancer Karima El Mahrough, who was 17 at the time of the alleged activity.
Berlusconi dismissed the accusations as "groundless" Wednesday, saying the call for a trial was a "farce."
There was no abuse of power, he said.
And he said he was "sorry because these (allegations) have offended the dignity of the country. They've thrown mud on the government, on the country and on myself at an international level."
The investigation began in December, after Berlusconi called police and urged them to release El Mahrough, nicknamed Ruby, from jail, where she was being held on charges of theft.
Prosecutors say the activity took place from February until May 2010. Both El Mahrough, now 18, and Berlusconi have denied they ever had sex.
El Mahrough said that she did not know Berlusconi well but that she did receive 7,000 euros (about $9,300) from him the first time they met, on Valentine's Day 2010, because a friend told Berlusconi she needed help.
The young woman's former roommate told investigators that El Mahrough confided to her that she did have a sexual relationship with the premier.
Berlusconi's party argued that he believed that Ruby was Egyptian President Hosni Mubarak's niece and the phone call to the police station on her behalf was done to avoid a possible diplomatic crisis with Egypt.
The lower house of Italy's parliament voted Thursday against allowing Milan prosecutors to search property belonging to Berlusconi, as part of the investigation.
The prosecutors asked permission last month to search Berlusconi's offices used by Giuseppe Spinelli, one of the prime minister's accountants.
Prosecutors suspect Spinelli of paying several young women with cash, jewelry or rent for apartments on behalf of the Italian premier for allegedly providing services, including prostitution.
Because he is the prime minister and a member of the lower house of parliament, Berlusconi enjoys partial immunity from prosecution. The Milan prosecutors are not allowed to search his property without the consent of parliament.
The parliamentary commission that handles such authorization requests ruled in January that Milanese prosecutors had no jurisdiction over the premier's alleged crimes, saying the charges should instead be considered by a special tribunal for ministers.
But the parliament still had to weigh in on the request, and rejected it 315-298.
Berlusconi also faces two other trials that are set to resume after the country's top court struck down part of a law protecting top officials from prosecution.
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