Allen Stanford was convicted on Tuesday of running a $7 billion Ponzi scheme, a verdict that caps a riches-to-rags trajectory for the former Texas financier and Caribbean playboy.

It was a vindication for the U.S. government, which closed down Stanford's financial empire in February 2009 but had failed for years to address signs that the business was built on air. The Stanford case was the biggest investment fraud since Bernard Madoff's.

Stanford was found guilty on 13 of 14 criminal counts, including fraud, conspiracy and obstructing an investigation by the U.S. Securities and Exchange Commission.

As Stanford, 61, was led out of the courtroom after the verdict, he touched his fist to his heart and looked at the bench where his mother and two daughters sat. He has been jailed since his June 2009 arrest.

We're disappointed in the outcome, said Stanford attorney Ali Fazel. We do expect an appeal. He said he expects sentencing in several months.

The charges carry a potential prison sentence of more than 200 years if the terms are served consecutively, but Stanford is more likely to face a maximum of about 20 years if, as is typical in white-collar cases, he is sentenced to concurrent prison terms.

The verdict came less than a day after the Houston federal jury said it could not reach a decision, and U.S. District Judge David Hittner instructed jurors to keep deliberating.

Still, the verdict may prove only a moral victory for Stanford's victims. Most have received none of the money back they invested in Stanford's certificates of deposit, though prosecutors are trying to seize more than $300 million in offshore assets tied to Stanford and other entities that have been frozen.

For all the investors I think there is a sense of relief that they weren't just fools, said Cassie Wilkinson, a Houston investor in Stanford funds who attended the six-week trial. There was a jury of 12 people who found the same thing - that we were just conned.

Stanford's unraveling was one of the most closely watched fraud cases since Madoff's. Madoff, 73, pleaded guilty in 2009 to orchestrating what prosecutors have called a $64.8 billion Ponzi scheme. He is serving a 150-year prison sentence.

'PERSONAL ATM'

Stanford's personal fortune was once valued at $2.2 billion.

At trial, prosecutors told how he repeatedly raided the bank he owned in Antigua, Stanford International Bank, using it as his personal ATM.

He bought a castle in Florida for one of his girlfriends and his oldest daughter lived in a million-dollar condominium in Houston. He wore custom-made suits and bankrolled a $20 million prize for an international cricket tournament.

A few hours after the verdict, jurors returned to the courtroom to consider the government's demand that more than $300 million in about 30 bank accounts tied to Stanford and other entities be forfeited. The money is held in accounts in Geneva, the United Kingdom and Canada in the names of Stanford and other entities, according to the government.

Every single dollar that the U.S. is seeking to forfeit is CD depositor money that stems from Mr. Stanford's crimes and belongs to the victims of his crimes, said prosecutor Andrew Warren. The jury is to hear more testimony in the forfeiture case on Wednesday.

In a telephone interview after the verdict, Kevin Sadler, lead counsel for Ralph Janvey, the court-appointed receiver charged with returning money to Stanford investors, called the verdict an important milestone and said it should help in prosecutors' efforts to seize the frozen assets.

At the trial, the government's star witness, former Stanford aide James Davis, testified that he and Stanford faked documents and made up financial reports. They funneled millions of dollars from Stanford International Bank to a secret Swiss bank account that Stanford tapped for his personal use, Davis testified.

Stanford's lawyers portrayed their client as a visionary who was not involved in his firm's daily activities. They blamed Davis for any fraud and argued that Stanford's businesses were viable until the government shut down Stanford Financial Group in Houston in February 2009. Left with no money, Stanford was declared indigent by the court and his defense was paid for with public funds.

Wendell Odom, a criminal defense attorney in Houston who observed much of the trial, said Stanford's attorneys did a good job of discrediting Davis, who has pleaded guilty to three criminal counts, by getting him to admit to being a liar. But they failed to develop an alternative theme for the jury. There was just too much evidence, he said.

BRAIN INJURY

While in jail awaiting trial, Stanford was beaten by another inmate, leaving him with a brain injury and an addiction to an anti-anxiety medication. After eight months at a prison hospital, he was deemed competent to stand trial despite arguments from his lawyers that he had lost his memory.

Before his trial began on January 23, Stanford's lawyers said their client wanted to tell his story to the jury, but he ultimately did not testify.

Stanford grew up in Mexia, Texas. He studied finance at Baylor University, where Davis, who later become chief financial officer of Stanford Financial Group, was his roommate.

In the 1980s, he became a Houston real estate investor. He later opened an offshore bank on the Caribbean island of Montserrat and, after banking regulations there tightened, he moved his operation to Antigua. The bank specialized in aggressively selling certificates of deposit, his former employees testified. They targeted clients in Latin America, especially Venezuela, and oil company workers on the U.S. Gulf Coast.

In Antigua, he became a philanthropist and sponsor of cricket, the national sport, and was known as Sir Allen after being knighted there in 2006. By 2008, Stanford made No. 205 on Forbes magazine's list of the wealthiest Americans.

But questions surfaced about how Stanford International Bank's CDs could persistently pay above market rates. By February 2009, investors were trying to withdraw their money and, on February 17 of that year, the government descended on his headquarters in Houston and shut it down.

Antigua stripped him of his knighthood and seized his local assets.

(Reporting by Anna Driver, Eileen O'Grady and Chris Baltimore; Editing by Martha Graybow and Matthew Lewis)