At TPMmuckraker, we’ve been closely following the case of Sir Allen Stanford, the colorful Texas billionaire who secured himself a knighthood from the government of Antigua (where he is the largest employer) but who falsely claimed for a time that the British Crown had presented the honor. Stanford has also gone around claiming to be a descendant of the founder of Stanford University, even though the school denies there’s any family connection there and is suing Stanford’s company for trademark infringement.
As you can see, Sir Allen is a real Texas-size character. He actually looks a bit like Clark Gable, though I think his cinematic antecedent may be more along the lines of Jett Rink or Charles Foster Kane.
Stanford has padded his rise with substantial political contributions
to Democratic and Republican politicians alike. (Here, for example, is Bill Clinton singing Stanford’s praises at a Stanford-sponsored shindig in Denver during the Democratic National Convention last summer. You’ll see other luminaries there, too, like Nancy Pelosi, Tom Brokaw, and Madeline Albright.) We’re investigating reports of at least one national politician taking a junket down to Antigua on Stanford’s dime.
What’s gotten Stanford into trouble are the spectacular annual returns on certificates of deposits issued by his Antigua-based Stanford International Bank. More on that in a moment.
The story of how Stanford came to the attention of the regulators and the media is a story in itself. Bloomberg first reported on SEC subpoenas of Stanford last July, and had apparently been investigating Stanford ever since. But the Madoff-like consistency of the performance of these CDs, despite market upheavals, caught the attention of a guy named Alex Dalmady, a financial analyst with a friend invested in the questionable CDs. Dalmady first suggested a Ponzi scheme was afoot in an article published in an obscure financial newsletter in Venezuela last month. (Apparently a significant number of Stanford investors are in Latin America.) That eventually prompted more stories about Stanford in BusinessWeek last week, and Bloomberg came out with some (though I suspect still not all) of its investigative work.
But the scope of the fraud and details about what went down have been only hinted at until this morning, when the SEC filed a civil enforcement case against Stanford in Dallas, alleging a multibillion fraud “of shocking magnitude that has spread its tentacles throughout the world.” Meanwhile, U.S. Marshals were seen entering Stanford’s office in Houston, and late word is that a sign on the Houston office door announces Stanford’s company is now in receivership.
Some $8 billion that was apparently deposited at Stanford International Bank in Antigua is now unaccounted for, according to the SEC.
Offshore banks. Political contributions. Ponzi allegations. Billions missing. This is a live one, folks.
