NU Online News Service, July 22, 3:55 p.m.EDT

A Venezuelan investor has sued London-based insurance brokerWillis Group Holdings Ltd. and its U.S.-based subsidiary, Willis ofColorado, for providing false assurances that Certificates ofDeposit offered by Stanford International Bank of Antigua wereinsured.

The lawsuit, seeking class-action status, was filed by ReinaldoRanni of Venezuela on behalf of a group of Latin Americaninvestors, alleging that the Willis Group "played an instrumentalrole in enabling Allen Stanford [founder of SIB] to perpetuate amassive multibillion-dollar fraud against scores of investors."

According to the lawsuit, from 2005 to 2008 Willis providedletters to investors indentifying policies issued by Lloyd's ofLondon, verifying SIB's practices. The letters also claimed thatSIB had undergone an independent audit.

However, the lawsuit states that none of this was true. It saysthere was no insurance policy from Lloyd's backing investors' CDsand the independent audit was conducted by a small Antiguan firmcontrolled by Mr. Stanford.

The letters also declared those at Stanford International Bankto be "first-class business people" and that all "dealings with thebank have been conducted in a professional and satisfactorymatter," according to the lawsuit.

From 1998 through February of 2009, the lawsuit stated, AllenStanford used SIB and the affiliated Houston-based Stanford GroupCompany to execute a large-scale Ponzi scheme where he embezzledbillions of dollars worth of investor funds through these falseCDs.

Mr. Stanford was indicted in June on 21 counts of fraud,conspiracy and obstruction of justice. He was denied bond and isnow in custody, facing a maximum of 250 years in prison.

A large portion of these false CDs were issued to South Americaninvestors through the Miami office of the Stanford Group Company.Mr. Ranni, along with these other investors, relied on theassurances from the Willis letters to finally decide on investingin a CD, the lawsuit said.

"Willis provided these letters to Stanford, and sometimesdirectly to investors, knowing these statements were false, or withsevere recklessness as to the letters' veracity," the lawsuitalleged. "Willis had every expectation investors would be relyingon the letters in deciding to invest in what they believed weresafe, insured high-yield CDs."

A spokesperson from Willis declined to comment on theallegations.

The lawsuit was filed on Friday in Miami federal court, chargingWillis with negligence, fraud, misrepresentation and violation ofFlorida and U.S. security laws. It seeks undetermined damages foras many as 2,100 investors, with Mr. Ranni claiming approximately$2.5 million in losses.

According to news reports, a similar lawsuit was filed againstWillis for assurances of Stanford CDs on July 2 in a Dallas federalcourt by 3,000 Mexican investors, claiming damages possiblysurpassing $1 billion.