A lawsuit was recently filed in Washington, D.C., against the attorney of R. Allen Stanford, who is on trial for allegedly swindling more than $7 billion from investors who purchased certificates of deposit through a Caribbean-based bank belonging to him.

According to the civil litigation, the attorney worked with several other groups to hide the bilked funds from investors and the Securities and Exchange Commission. Two law firms are also named in the suit, suggesting that they assisted the man with his supposed cover-up.

The lawsuit is seeking at least $1.8 billion in damages. That figure represents an amount the lawsuit says was made in "bogus" personal loans to Stanford.

Allegations suggest that one of the defendants -- a former SEC lawyer -- lied to SEC investigators and obstructed the investigation into Stanford by hiding pertinent documents. This lawyer worked at both of the law firms named in the suit while Stanford was a client. His federal trial recently got underway in another state.

The plaintiff -- a receiver assigned to recover assets -- believes the two law firms did not properly supervise the former SEC attorney during the time that he was supposedly obstructing the investigation.

Both law firms have denied the allegations. Previous lawsuits filed against one of the firms pertaining to this case have been dismissed so the law firm expects a similar result.

Anything received through this litigation will eventually benefit investors who lost money in the alleged scheme that cost several billions of dollars to unwitting victims. People who believe they were swindled by Stanford should let an attorney know.

Source: Houston Chronicle, "Receiver sues former Stanford lawyer, 2 firms," Purva Patel, Feb. 1, 2012