Two months after one of Miami’s most celebrated drug cops was charged in the Allen Stanford financial scandal, a federal magistrate is recommending that one of the key charges be thrown out.
Judge Robin Rosenbaum said prosecutors failed to prove Tom Raffanello — head of security for Stanford’s worldwide enterprise — interfered with a federal investigation by ordering the destruction of reams of company documents.
The former Drug Enforcement Administration chief, who left the agency to join Stanford’s security force in 2004, was charged with ordering the shredding of records just days after federal agents shut down Stanford’s empire in a massive fraud case in February.
Though prosecutors said Raffanello defied a court order by destroying the documents, Rosenbaum said the government failed to show he impeded the U.S. Securities and Exchange Commission’s probe.
The magistrate fell short of rejecting the entire case, however, saying prosecutors were able to show the former drug cop destroyed records in the course of a federal investigation. Her recommendation will be taken up by presiding Judge William Zloch later this month.
The charges over the destruction of the records — including sensitive background checks on employees and investors — are just part of the government’s case against Stanford, who prosecutors say orchestrated a $7 billion Ponzi scheme.
Raffanello’s attorney, Richard Sharpstein, said he was pleased with Rosenbaum’s recommendation. “We hope Judge Zloch not only agrees with Judge Rosenbaum, but throws out the entire case,” he said.
Lead prosecutor Paul Pelletier could not be reached on Monday. However, prosecutors have argued in prior hearings that Raffanello and co-defendant Bruce Perraud were aware of a judge’s order to preserve all company documents when they called a shredding truck to the company’s Fort Lauderdale security bunker on February 25.
Federal agents have been scrambling to trace billions of dollars that flowed through Stanford’s Antiguan bank over the past decade.
Ruling mostly on technical grounds, Rosenbaum said the order to preserve the records was for the court-appointed receiver and not the SEC. “[The indictment] does not assert that defendants knew that when they allegedly obstructed the receiver’s investigation, they were also interfering with the SEC’s proceeding,” Rosenbaum wrote.
She also threw out a portion of a conspiracy count relating to the obstruction charge. A trial on the remaining counts is tentatively set for January.