Curt Anderson of the Associated Press reports on the destruction of evidence trial (the “Stanford shredding case”) related to the Allen Stanford Ponzi scheme of two of Stanford’s subordinates, one a former DEA head of office in Miami. From Anderson’s Prosecutor: Stanford execs knew shredding wrong:

Two senior employees at disgraced financier Allen Stanford’s worldwide security office knew it was wrong to shred thousands of documents but did it to thwart an investigation into what became a $7 billion Ponzi scheme, a federal prosecutor said Wednesday in closing arguments at the men’s trial.

Numerous company e-mails and other evidence showed that Stanford Financial Group’s former security chief, Thomas Raffanello, and technology officer Bruce Perraud were well aware in February 2009 that the Securities and Exchange Commission had obtained a court order requiring preservation of all Stanford documents, said senior Justice Department litigator Jack Patrick.

“It’s a case of knowing what you should do and not doing it,” Patrick told a jury after a weeklong trial. “It seems like their mantra was not to cooperate, but to frustrate.”

Raffanello, a former longtime head of the U.S. Drug Enforcement Administration’s Miami office, and Perraud are charged with conspiracy, obstruction of an SEC investigation and two related charges. If convicted of all four counts, they face maximum prison terms of 50 years each.

The document shredding took place at Stanford’s office in Fort Lauderdale just as the company’s banking empire was collapsing last year. Stanford, awaiting trial in Houston, is accused of using certificates of deposit billed as paying double market rates to bilk thousands of investors out of $7 billion, mainly by using money from new investors to pay off older ones in a classic Ponzi scam.

Attorneys for Raffanello and Perraud contend that no crime was committed because the records in question were duplicated in electronic form and that the shredding was a normal part of Stanford’s everyday business. Raffanello attorney Richard Sharpstein called the charges “an insult” because they are based on flimsy or misleading evidence.

“Everything was loaded in the computer,” Sharpstein said. “They decided, ‘We can shred this’ because it’s there. That is a fantastically ridiculous, fatal flaw in this case.”

Jurors were expected to begin deliberations later Wednesday or Thursday.

The shredded records included information about investors, properties owned by Stanford and his companies and business travel records by company executives. Testimony showed that Perraud initially halted the shredding when he found out about the document preservation order on Feb. 17, 2009, but complied after Raffannello ordered it to take place a week later.

The Miami Herald’s excellent coverage of the case As feds closed in, Allen Stanford scrambled to keep fraud secret, money flowing by Herald Staff Writers Michael Sallah and Rob Barry, includes these details about destruction of evidence in the case:

With federal agents mounting a probe into his offshore bank, billionaire Allen Stanford drove up a dirt road, hauling records from his headquarters to the top of a lush, tropical mountain.

As the sun set over the island, the banker stuffed the papers into a steel drum, poured gasoline over the top and sparked a fire — the flames rising into the sky.

By Jan. 14, 2009, the SEC was now ordering Stanford and two of his top officers, CFO Davis and chief investment officer Laura Pendergest-Holt, to talk to investigators.

That month,[Carrie] Freyn [Stanford's personal assistant and chef] and others recall Stanford driving up the dirt road on Mount Welcome in St. Croix, hauling a box stuffed with documents from his office.

After dumping the papers in a steel drum, Stanford and a handyman doused the top with gas and lit the contents. “We thought it was crazy,’ Freyn recalled. “You don’t just go up there and light a bonfire without a permit.’

The records, which included Stanford’s bank and credit-card statements, were torched at the same time Davis was ordering an employee to destroy bank records in Antigua, federal court records state.