NEW YORK (PNN) - May 1, 2012 - Mitt Romney and his son Tagg Romney have been implicated in an $8.5 billion Ponzi scheme with Wall Street investors Allen Stanford and James M. Davis.

The pair are not cleared, including their three partners, in an ongoing legal proceeding involving selling fraudulent Certificates of Deposit to potential investors.

The statement of fact alleges that SIBL, Stanford International Bank, SGC Stanford Capital Management, and the associates R. Allen Stanford and James M. Davis, stole money from investors through fraud. The group bilked investors by diverting funds to their own lifestyles through bonus money, salaries and compensation packages.

The Stanford Financial Group - now in receivership - headed by Allen Stanford sold investments described as a “well-diversified portfolio”. Instead, Stanford diverted the money to finance his own lavish lifestyle, including jet planes, a yacht, pleasure crafts, luxury cars, homes, and travel on a company credit card.

Allen Stanford, James M. Davis and Laura Pendergest-Holt, through Stanford International Bank, hid the fraud by continuing to buy CDs, and fabricated the performance of their investments.

A court date was set for January 23, 2012 but according to various reports Allen Stanford is incompetent to stand trial.

In 2008, Mitt Romney and his son Tagg invested in Allen Stanford’s Ponzi scheme to the tune of $10 million in Solamere Capital as a seed investment, and received $1 million in returns. Tagg Romney joined in to help Solamere Capital, located in Charlotte, North Carolina, with three other prominent brokers.

Tagg Romney said he was proud of his investment with Solamere, which is now run by former executives of Stanford. “They’re friends of ours, they used the Solamere name, (and now) we own a piece of them. We helped them get started,” he said.

Profits from Stanford and Solamere were unreported by Tagg Romney. He also possessed a minority stake in the business with Spencer Zwick and Eric Scheuermann. Spencer Zwick is Mitt Romney’s chief fundraiser.

Investors in Stanford have not recovered their money, and the assets are still in receivership and frozen until the case is resolved. A total of $8.5 billion is still unaccounted for and the billion-dollar Ponzi scheme rests at Mitt Romney’s feet.