Allen Stanford
Encyclopedia
Robert Allen Stanford is a former prominent financier
and sponsor of professional sports who is in prison awaiting trial on charges his investment company was a massive Ponzi scheme
and fraud
. Stanford was the chairman of the now defunct Stanford Financial Group
of Companies. A fifth-generation Texan who once resided in St. Croix
, U.S. Virgin Islands
, he holds dual citizenship
, being a citizen of Antigua and Barbuda
and a United States citizen. Allen Stanford is still in US custody and waiting for his trial to start in September of 2011.
In early 2009, Stanford became the subject of several fraud
investigations, and on February 17, 2009, was charged by the U.S. Securities and Exchange Commission with fraud and multiple violations of U.S. securities laws for alleged "massive ongoing fraud" involving $8 billion in certificates of deposits. The FBI raided three of Stanford's offices in Houston, Memphis
, and Tupelo, Mississippi
. On February 27, 2009, the SEC amended its complaint to describe the alleged fraud as a "massive Ponzi scheme
". He "voluntarily surrendered" to authorities on June 18, 2009.
. His father, James Stanford, is former mayor of Mexia and a member of the Board of Directors of Stanford Financial Group
. His mother, Sammie, is a nurse. After his parents divorced in 1959, Stanford and his brother went to live with their mother. Both of his parents remarried.
Stanford graduated from Eastern Hills High School
in Fort Worth, Texas
. In 1974, Stanford graduated from Baylor University
in Waco, Texas
, earning a Bachelor of Arts degree in finance.
article described Stanford as "the leading benefactor, promoter, employer and public persona" of Antigua and Barbuda
. Knighted by the country in 2006, Stanford used the title "Sir Allen." Antiguans also generally referred to Stanford using the title. In October 2009 the National Honors Committee of Antigua and Barbuda voted unanimously to strip Stanford of his knighthood, and informed the prime minister of this decision on October 26. On November 2, 2009 the recommendation was forwarded to the Governor-General, Sir James Carlisle. The order to revoke Stanford's knighthood and insignia was approved and was served upon Stanford on April 1, 2010 after Governor-General Dame Louise Lake-Tack
, signed the order revoking his knighthood.
from the Texas oil bubble burst in the early 1980s. His partner in the real estate venture was his father James. In the 1980s, Stanford and his father made a fortune buying up depressed Houston
real estate and selling it years later as the market recovered. When his father retired in 1993, Stanford took control of a company with 500 employees.
Stanford moved to the Caribbean in the 1980s, first to Montserrat
and then to Antigua
. With the Stanford Finance, he started a bank on the island of Montserrat
in 1985, Guardian International Bank, which he moved to Antigua
during a British crackdown on Montserrat's offshore-banking
industry in 1980s and renamed Stanford International Bank
, an affiliate of Stanford Financial.
In early 2007, Stanford and Baldwin Spencer
, the prime minister of Antigua and Barbuda
and a former Stanford ally, began verbally feuding in public.
In 2009, Antigua's Financial Services Regulatory Commission has named a British firm, Vantis
Business Recovery Services, as a receiver of Stanford International Bank and Stanford Trust Company, the Associated Press
reported.
, the Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority
(FINRA), a major U.S. private-sector oversight body, were investigating Stanford's company Stanford Financial Group
, questioning the means by which Stanford International Bank manages consistently to make higher-than-market returns to its depositors. A former executive told SEC officials that Stanford presented hypothetical investment results as actual historical data in sales pitches to clients. Stanford claimed his CDs were as safe as, or safer than, US government-insured accounts.
A leaked cable from the U.S. Embassy in the Bahamas reported as early as 2006 that companies under Stanford's control were "rumored to engage in bribery, money laundering, and political manipulation." The U.S. Ambassador to the Bahamas at the time was reported to have "managed to stay out of any one-on-one photos with Stanford" during a charity breakfast event.
Federal agents raided the offices of Stanford Financial on February 17, 2009, and treated it as "a kind of crime scene
—cautioning people not to leave fingerprints."
The Securities and Exchange Commission charged Allen Stanford with "massive ongoing fraud" centered on an eight-billion-dollar investment scheme. Stanford's assets, along with those of his companies, were frozen and placed into receivership
by a U.S. federal judge, who also ordered Stanford to surrender his passport.
CNBC later reported that Stanford tried to flee the country on the same day as the raids on his headquarters: he contacted a private jet owner and attempted to pay for a flight to Antigua
with a credit card
, but was refused because the company would accept only a wire transfer.
FBI agents, acting at the request of the SEC, on February 19 located Stanford at his girlfriend's house near Fredericksburg, Virginia
, and served him with civil legal papers filed by the SEC. Stanford was not arrested until June 18, 2009. Stanford has surrendered his passport to federal prosecutor
s, and he has hired the prominent criminal defence lawyer Brendan Sullivan
, who represented Oliver North
. The SEC often files civil charges before criminal charges are filed.
Following the allegations, various governments have taken over Stanford's business operations. The Eastern Caribbean Central Bank (ECCB)
announced that it has taken over the local operations of the Bank of Antigua
(BOA) which will be renamed the Eastern Caribbean Amalgamated Bank (ECAB).
The Venezuela
n Government also took over the Stanford Bank Venezuela
, the local branch of Stanford's bank in that nation.
On February 27, the SEC said that Stanford and his accomplices operated a "massive Ponzi scheme
", misappropriated billions of investors' money and falsified the Stanford International Bank's records to hide their fraud
. "Stanford International Bank's financial statements, including its investment income, are fictional," the SEC said.
In an interview
on April 20 at the law offices of Houston criminal attorney Dick DeGuerin
, however, Stanford denied any wrongdoing. His companies had been well-run, he claimed, until the SEC "disembowelled" them.
On June 18, 2009, Stanford was taken into custody by FBI agents. According to DeGuerin:
On June 25, 2009, Stanford appeared in a Houston court and pleaded not guilty to charges of fraud, conspiracy and obstruction. His lawyer claimed that he, Stanford, had resorted to liberal alcohol intake to grapple with the strain of the proceedings.
On August 27, 2009, Stanford was admitted into the Conroe, Texas
Regional Medical Center. He was being transported from the private prison
in Huntsville, Texas
to the Federal Courthouse in Houston to attend a hearing concerning his attorney, who has asked the court to be dismissed from Stanford's case. En route, Stanford complained of a racing heart.
On September 26, 2009 it was reported Stanford had been hospitalized due to injuries sustained in a fight with another inmate at the private Joe Corley Detention Facility. His injuries were described as non-life threatening.
On November 8, 2010, it was reported that Stanford had been hospitalized due to severe injuries sustained when he was brutally assaulted by inmates at a private prison, Joe Corley Detention Center, in Conroe, Texas). Photographs show him with his neck in a brace, his eye half-shut, a bandage wrapped around his head, and shackled hand and foot.
Stanford's trial date was set for January 2011, but this was delayed due to his poor health
Stanford, Federal Bureau of Prisons
#35017-183, is incarcerated at the Federal Detention Center, Houston
.
In February 2011 Stanford issued a counter-claim of $7.2B of damages against the FBI and the SBC.
In May prosecutors dropped seven charges against Stanford, leaving 14 charges ongoing. A trial date has yet to be set due to his poor health.
As of November 5, 2011, Stanford is being held with an unknown release date at the Federal Medical Center, Butner, North Carolina, part of the Butner Federal Correctional Complex.
, affirming much of a United States Tax Court
’s ruling on a dispute emanating from Stanford’s days of running the bank in Montserrat. In short, the court found that Stanford and his wife, Susan, under reported their 1990 federal taxes
by $423,531.36. Public records show Stanford owes hundreds of millions of dollars in federal taxes. There are four federal tax lien
s from 2007 and 2008 against Stanford totaling more than $212 million.
for Mexico's Gulf Cartel
.
, the founder of Stanford University
. He funded the restoration of Leland Stanford's mansion in Sacramento, California
in an effort "to help preserve an important piece of Stanford family history," and hired his own genealogists to prove he was a member of the Leland Stanford family. ""We are not aware of any genealogical relationship between Allen Stanford and Leland Stanford," said a university spokesperson at the time, and in 2008 filed a trademark infringement suit against Stanford claiming the school’s name was being used “in a way that creates public confusion” and is “injurious.”
Cricket
tournament in the West Indies, for which he built his own ground in Antigua
. The first Stanford 20/20 Cricket Tournament was held in July and August 2006. The second tournament took place in January and February 2008 with a global television audience of 300 million. Trinidad and Tobago took first place in this tournament. This team also took home the US280k Super Series
prize after defeating Middlesex
on October 27, 2008.
In June 2008, Stanford and the England and Wales Cricket Board
(ECB) signed a deal for five Twenty20
internationals between England and a West Indies all-star XI with a total prize fund of £12.27m (US $20 million) to be awarded to the team that wins the Championship. It was the largest prize ever offered to a team for a single tournament.
This was in jeopardy after a row with Digicel
, the sponsors of the West Indies cricket team, who were unhappy about sponsorship of the event. Eventually, the dispute was sorted out and the Championship was won by Stanford Superstars, who defeated the England team by 10 wickets, humiliating them in the Twenty 20 arena.
On February 17, 2009, when news of the fraud investigation became public, the ECB and WICB
withdrew from talks with Stanford on sponsorship. On February 20 the ECB announced it has severed its ties with Stanford and cancelled all contracts with him.
and Saint Kitts and Nevis
, which both went by the name of The Sun. Following the scandal, both newspapers put workers on notice that their full operations would cease in April 2010.
Financier
Financier is a term for a person who handles typically large sums of money, usually involving money lending, financing projects, large-scale investing, or large-scale money management. The term is French, and derives from finance or payment...
and sponsor of professional sports who is in prison awaiting trial on charges his investment company was a massive Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
and fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
. Stanford was the chairman of the now defunct Stanford Financial Group
Stanford Financial Group
The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States authorities in early 2009....
of Companies. A fifth-generation Texan who once resided in St. Croix
Saint Croix, U.S. Virgin Islands
Saint Croix is an island in the Caribbean Sea, and a county and constituent district of the United States Virgin Islands , an unincorporated territory of the United States. Formerly the Danish West Indies, they were sold to the United States by Denmark in the Treaty of the Danish West Indies of...
, U.S. Virgin Islands
United States Virgin Islands
The Virgin Islands of the United States are a group of islands in the Caribbean that are an insular area of the United States. The islands are geographically part of the Virgin Islands archipelago and are located in the Leeward Islands of the Lesser Antilles.The U.S...
, he holds dual citizenship
Multiple citizenship
Multiple citizenship is a status in which a person is concurrently regarded as a citizen under the laws of more than one state. Multiple citizenships exist because different countries use different, and not necessarily mutually exclusive, citizenship requirements...
, being a citizen of Antigua and Barbuda
Antigua and Barbuda
Antigua and Barbuda is a twin-island nation lying between the Caribbean Sea and the Atlantic Ocean. It consists of two major inhabited islands, Antigua and Barbuda, and a number of smaller islands...
and a United States citizen. Allen Stanford is still in US custody and waiting for his trial to start in September of 2011.
In early 2009, Stanford became the subject of several fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
investigations, and on February 17, 2009, was charged by the U.S. Securities and Exchange Commission with fraud and multiple violations of U.S. securities laws for alleged "massive ongoing fraud" involving $8 billion in certificates of deposits. The FBI raided three of Stanford's offices in Houston, Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
, and Tupelo, Mississippi
Tupelo, Mississippi
Tupelo is the largest city in and the county seat of Lee County, Mississippi, United States. It is the seventh largest city in the state of Mississippi, smaller than Meridian, and larger than Greenville. As of the 2000 United States Census, the city's population was 34,211...
. On February 27, 2009, the SEC amended its complaint to describe the alleged fraud as a "massive Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
". He "voluntarily surrendered" to authorities on June 18, 2009.
Early years
Stanford grew up in Mexia, TexasMexia, Texas
Mexia is a city in Limestone County, Texas, United States. The population was 6,552 at the 2008 census.The city's motto, based on the fact that outsiders tend to mispronounce the name , is "A great place, no matter how you pronounce it."...
. His father, James Stanford, is former mayor of Mexia and a member of the Board of Directors of Stanford Financial Group
Stanford Financial Group
The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States authorities in early 2009....
. His mother, Sammie, is a nurse. After his parents divorced in 1959, Stanford and his brother went to live with their mother. Both of his parents remarried.
Stanford graduated from Eastern Hills High School
Eastern Hills High School
Eastern Hills High School is a four-year public high school in Fort Worth, Texas, United States, educating students in grades 9-12, as part of the Fort Worth Independent School District. In an historical footnote, the band from the school played "Hail to the Chief" during President JFK's visit to...
in Fort Worth, Texas
Fort Worth, Texas
Fort Worth is the 16th-largest city in the United States of America and the fifth-largest city in the state of Texas. Located in North Central Texas, just southeast of the Texas Panhandle, the city is a cultural gateway into the American West and covers nearly in Tarrant, Parker, Denton, and...
. In 1974, Stanford graduated from Baylor University
Baylor University
Baylor University is a private, Christian university located in Waco, Texas. Founded in 1845, Baylor is accredited by the Southern Association of Colleges and Schools.-History:...
in Waco, Texas
Waco, Texas
Waco is a city in and the county seat of McLennan County, Texas. Situated along the Brazos River and on the I-35 corridor, halfway between Dallas and Austin, it is the economic, cultural, and academic center of the 'Heart of Texas' region....
, earning a Bachelor of Arts degree in finance.
Knighthood and revocation
A February 2009 Houston ChronicleHouston Chronicle
The Houston Chronicle is the largest daily newspaper in Texas, USA, headquartered in the Houston Chronicle Building in Downtown Houston. , it is the ninth-largest newspaper by circulation in the United States...
article described Stanford as "the leading benefactor, promoter, employer and public persona" of Antigua and Barbuda
Antigua and Barbuda
Antigua and Barbuda is a twin-island nation lying between the Caribbean Sea and the Atlantic Ocean. It consists of two major inhabited islands, Antigua and Barbuda, and a number of smaller islands...
. Knighted by the country in 2006, Stanford used the title "Sir Allen." Antiguans also generally referred to Stanford using the title. In October 2009 the National Honors Committee of Antigua and Barbuda voted unanimously to strip Stanford of his knighthood, and informed the prime minister of this decision on October 26. On November 2, 2009 the recommendation was forwarded to the Governor-General, Sir James Carlisle. The order to revoke Stanford's knighthood and insignia was approved and was served upon Stanford on April 1, 2010 after Governor-General Dame Louise Lake-Tack
Louise Lake-Tack
Dame Louise Agnetha Lake-Tack, GCMG, DStJ is the current Governor-General of Antigua and Barbuda.-Background and earlier career:...
, signed the order revoking his knighthood.
Career
Stanford started in business in Waco, where he opened a bodybuilding gym, but it failed. His first success in business was in Houston real estateReal estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
from the Texas oil bubble burst in the early 1980s. His partner in the real estate venture was his father James. In the 1980s, Stanford and his father made a fortune buying up depressed Houston
Houston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
real estate and selling it years later as the market recovered. When his father retired in 1993, Stanford took control of a company with 500 employees.
Stanford moved to the Caribbean in the 1980s, first to Montserrat
Montserrat
Montserrat is a British overseas territory located in the Leeward Islands, part of the chain of islands called the Lesser Antilles in the West Indies. This island measures approximately long and wide, giving of coastline...
and then to Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...
. With the Stanford Finance, he started a bank on the island of Montserrat
Montserrat
Montserrat is a British overseas territory located in the Leeward Islands, part of the chain of islands called the Lesser Antilles in the West Indies. This island measures approximately long and wide, giving of coastline...
in 1985, Guardian International Bank, which he moved to Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...
during a British crackdown on Montserrat's offshore-banking
Offshore bank
An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. These advantages typically include:...
industry in 1980s and renamed Stanford International Bank
Stanford International Bank
Stanford International Bank was a bank based in the Caribbean, which operated from 1986 to 2009. It was an affiliate of the Stanford Financial Group.- Operations :...
, an affiliate of Stanford Financial.
In early 2007, Stanford and Baldwin Spencer
Baldwin Spencer
Winston Baldwin Spencer is the Prime Minister of Antigua and Barbuda. He has been Prime Minister since March 24, 2004, when his party, the United Progressive Party , which he had led as the opposition party for several years, won a parliamentary election...
, the prime minister of Antigua and Barbuda
Antigua and Barbuda
Antigua and Barbuda is a twin-island nation lying between the Caribbean Sea and the Atlantic Ocean. It consists of two major inhabited islands, Antigua and Barbuda, and a number of smaller islands...
and a former Stanford ally, began verbally feuding in public.
In 2009, Antigua's Financial Services Regulatory Commission has named a British firm, Vantis
Vantis
Vantis plc was an accountancy firm based in London, England, providing accounting, tax and business advice to owner-managed businesses, listed companies, not for profit organisations, high net worth individuals and other professionals...
Business Recovery Services, as a receiver of Stanford International Bank and Stanford Trust Company, the Associated Press
Associated Press
The Associated Press is an American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalists...
reported.
Fraud allegations
Reports surfaced in early February 2009 that the Securities and Exchange Commission, the Federal Bureau of InvestigationFederal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
, the Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...
(FINRA), a major U.S. private-sector oversight body, were investigating Stanford's company Stanford Financial Group
Stanford Financial Group
The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States authorities in early 2009....
, questioning the means by which Stanford International Bank manages consistently to make higher-than-market returns to its depositors. A former executive told SEC officials that Stanford presented hypothetical investment results as actual historical data in sales pitches to clients. Stanford claimed his CDs were as safe as, or safer than, US government-insured accounts.
A leaked cable from the U.S. Embassy in the Bahamas reported as early as 2006 that companies under Stanford's control were "rumored to engage in bribery, money laundering, and political manipulation." The U.S. Ambassador to the Bahamas at the time was reported to have "managed to stay out of any one-on-one photos with Stanford" during a charity breakfast event.
Federal agents raided the offices of Stanford Financial on February 17, 2009, and treated it as "a kind of crime scene
Crime scene
A crime scene is a location where an illegal act took place, and comprises the area from which most of the physical evidence is retrieved by trained law enforcement personnel, crime scene investigators or in rare circumstances, forensic scientists....
—cautioning people not to leave fingerprints."
The Securities and Exchange Commission charged Allen Stanford with "massive ongoing fraud" centered on an eight-billion-dollar investment scheme. Stanford's assets, along with those of his companies, were frozen and placed into receivership
Receivership
In law, receivership is the situation in which an institution or enterprise is being held by a receiver, a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights." The receivership remedy is an equitable remedy that emerged in...
by a U.S. federal judge, who also ordered Stanford to surrender his passport.
CNBC later reported that Stanford tried to flee the country on the same day as the raids on his headquarters: he contacted a private jet owner and attempted to pay for a flight to Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...
with a credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
, but was refused because the company would accept only a wire transfer.
FBI agents, acting at the request of the SEC, on February 19 located Stanford at his girlfriend's house near Fredericksburg, Virginia
Fredericksburg, Virginia
Fredericksburg is an independent city in the Commonwealth of Virginia located south of Washington, D.C., and north of Richmond. As of the 2010 census, the city had a population of 24,286...
, and served him with civil legal papers filed by the SEC. Stanford was not arrested until June 18, 2009. Stanford has surrendered his passport to federal prosecutor
Prosecutor
The prosecutor is the chief legal representative of the prosecution in countries with either the common law adversarial system, or the civil law inquisitorial system...
s, and he has hired the prominent criminal defence lawyer Brendan Sullivan
Brendan Sullivan
Brendan V. Sullivan, Jr. is a senior partner of the law firm Williams & Connolly. Sullivan is probably best known for the role he served, in the late 1980s, as defense counsel for United States Marines Lieutenant-Colonel Oliver North in the wake of the Iran-Contra scandal...
, who represented Oliver North
Oliver North
Oliver Laurence North is a retired U.S. Marine Corps officer, political commentator, host of War Stories with Oliver North on Fox News Channel, a military historian, and a New York Times best-selling author....
. The SEC often files civil charges before criminal charges are filed.
Following the allegations, various governments have taken over Stanford's business operations. The Eastern Caribbean Central Bank (ECCB)
Eastern Caribbean Central Bank
The Eastern Caribbean Central Bank is the monetary authority of a group of six independent Caribbean nations namely:* Antigua and Barbuda,* Grenada,* Saint Kitts and Nevis,* Commonwealth of Dominica,* Saint Lucia,* Saint Vincent and the Grenadines,...
announced that it has taken over the local operations of the Bank of Antigua
Bank of Antigua
Bank of Antigua was formed on the 10 February 1981 in St. John's, Antigua. It was owned by the Stanford Financial Group which has been sued by the U.S. Securities and Exchange Commission, along with Robert Allen Stanford, the Stanford Financial Group's owner, for allegedly running a Ponzi scheme...
(BOA) which will be renamed the Eastern Caribbean Amalgamated Bank (ECAB).
The Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
n Government also took over the Stanford Bank Venezuela
Stanford Bank Venezuela
Stanford Bank Venezuela was Stanford International Bank's subsidiary in Venezuela. It was headquartered in Caracas and had many branches throughout Venezuela. The Venezuelan banking regulator estimated that Venezuelans had placed around $2.5bn in deposits with Stanford International...
, the local branch of Stanford's bank in that nation.
On February 27, the SEC said that Stanford and his accomplices operated a "massive Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
", misappropriated billions of investors' money and falsified the Stanford International Bank's records to hide their fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
. "Stanford International Bank's financial statements, including its investment income, are fictional," the SEC said.
In an interview
Interview
An interview is a conversation between two people where questions are asked by the interviewer to obtain information from the interviewee.- Interview as a Method for Qualitative Research:"Definition" -...
on April 20 at the law offices of Houston criminal attorney Dick DeGuerin
Dick DeGuerin
Dick DeGuerin is a criminal defense attorney based in Houston, Texas. DeGuerin was admitted to the State Bar in 1965...
, however, Stanford denied any wrongdoing. His companies had been well-run, he claimed, until the SEC "disembowelled" them.
On June 18, 2009, Stanford was taken into custody by FBI agents. According to DeGuerin:
On June 25, 2009, Stanford appeared in a Houston court and pleaded not guilty to charges of fraud, conspiracy and obstruction. His lawyer claimed that he, Stanford, had resorted to liberal alcohol intake to grapple with the strain of the proceedings.
On August 27, 2009, Stanford was admitted into the Conroe, Texas
Conroe, Texas
Conroe is a suburban city 40 miles north of Houston in the gulf coastal plains/piney woods region of southeast Texas.It is the seat of Montgomery County and falls within the metropolitan area.As of the 2000 U.S...
Regional Medical Center. He was being transported from the private prison
Private prison
A private prison, jail, or detention center is a place in which individuals are physically confined or interned by a third party that is contracted by a government agency...
in Huntsville, Texas
Huntsville, Texas
Huntsville is a city in and the county seat of Walker County, Texas, United States. The population was 35,508 at the 2010 census. It is the center of the Huntsville micropolitan area....
to the Federal Courthouse in Houston to attend a hearing concerning his attorney, who has asked the court to be dismissed from Stanford's case. En route, Stanford complained of a racing heart.
On September 26, 2009 it was reported Stanford had been hospitalized due to injuries sustained in a fight with another inmate at the private Joe Corley Detention Facility. His injuries were described as non-life threatening.
On November 8, 2010, it was reported that Stanford had been hospitalized due to severe injuries sustained when he was brutally assaulted by inmates at a private prison, Joe Corley Detention Center, in Conroe, Texas). Photographs show him with his neck in a brace, his eye half-shut, a bandage wrapped around his head, and shackled hand and foot.
Stanford's trial date was set for January 2011, but this was delayed due to his poor health
Stanford, Federal Bureau of Prisons
Federal Bureau of Prisons
The Federal Bureau of Prisons is a federal law enforcement agency subdivision of the United States Department of Justice and is responsible for the administration of the federal prison system. The system also handles prisoners who committed acts considered felonies under the District of Columbia's...
#35017-183, is incarcerated at the Federal Detention Center, Houston
Federal Detention Center, Houston
Federal Detention Center, Houston is a prison operated by the Federal Bureau of Prisons. The facility is located at the intersection of San Jacinto Avenue and Texas Avenue in Downtown Houston, and it houses male and female pretrial and holdover inmates.-Notable inmates:-External links:*...
.
In February 2011 Stanford issued a counter-claim of $7.2B of damages against the FBI and the SBC.
In May prosecutors dropped seven charges against Stanford, leaving 14 charges ongoing. A trial date has yet to be set due to his poor health.
As of November 5, 2011, Stanford is being held with an unknown release date at the Federal Medical Center, Butner, North Carolina, part of the Butner Federal Correctional Complex.
Tax liens
The United States Court of Appeals for the Fifth CircuitUnited States Court of Appeals for the Fifth Circuit
The United States Court of Appeals for the Fifth Circuit is a federal court with appellate jurisdiction over the district courts in the following districts:* Eastern District of Louisiana* Middle District of Louisiana...
, affirming much of a United States Tax Court
United States Tax Court
The United States Tax Court is a federal trial court of record established by Congress under Article I of the U.S. Constitution, section 8 of which provides that the Congress has the power to "constitute Tribunals inferior to the supreme Court"...
’s ruling on a dispute emanating from Stanford’s days of running the bank in Montserrat. In short, the court found that Stanford and his wife, Susan, under reported their 1990 federal taxes
Income tax in the United States
In the United States, a tax is imposed on income by the Federal, most states, and many local governments. The income tax is determined by applying a tax rate, which may increase as income increases, to taxable income as defined. Individuals and corporations are directly taxable, and estates and...
by $423,531.36. Public records show Stanford owes hundreds of millions of dollars in federal taxes. There are four federal tax lien
Tax lien
A tax lien is a lien imposed by law upon a property to secure the payment of taxes. A tax lien may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes....
s from 2007 and 2008 against Stanford totaling more than $212 million.
Money laundering investigation
The FBI and other agencies have been conducting an ongoing investigation of Stanford since 2008 for possible involvement in money launderingMoney laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
for Mexico's Gulf Cartel
Gulf Cartel
The Gulf Cartel is one of the most powerful drug cartels in Mexico, and perhaps the oldest organized crime group in the country...
.
Trademark infringement lawsuit
In 2001, Stanford said publicly that his great-great-great grandfather was a relative of Leland StanfordLeland Stanford
Amasa Leland Stanford was an American tycoon, industrialist, robber baron, politician and founder of Stanford University.-Early years:...
, the founder of Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
. He funded the restoration of Leland Stanford's mansion in Sacramento, California
Sacramento, California
Sacramento is the capital city of the U.S. state of California and the county seat of Sacramento County. It is located at the confluence of the Sacramento River and the American River in the northern portion of California's expansive Central Valley. With a population of 466,488 at the 2010 census,...
in an effort "to help preserve an important piece of Stanford family history," and hired his own genealogists to prove he was a member of the Leland Stanford family. ""We are not aware of any genealogical relationship between Allen Stanford and Leland Stanford," said a university spokesperson at the time, and in 2008 filed a trademark infringement suit against Stanford claiming the school’s name was being used “in a way that creates public confusion” and is “injurious.”
Cricket
Stanford created and funded the Stanford 20/20Stanford 20/20
The Stanford 20/20 Tournament was a cricket tournament in the Caribbean island of Antigua. It was held first in July and August 2006 in the West Indies at the Stanford Cricket Ground, St. John's, Antigua and Barbuda and the same place the year after...
Cricket
Cricket
Cricket is a bat-and-ball game played between two teams of 11 players on an oval-shaped field, at the centre of which is a rectangular 22-yard long pitch. One team bats, trying to score as many runs as possible while the other team bowls and fields, trying to dismiss the batsmen and thus limit the...
tournament in the West Indies, for which he built his own ground in Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...
. The first Stanford 20/20 Cricket Tournament was held in July and August 2006. The second tournament took place in January and February 2008 with a global television audience of 300 million. Trinidad and Tobago took first place in this tournament. This team also took home the US280k Super Series
Stanford Super Series
The Stanford Super Series were a series of Twenty20 cricket matches, sponsored by Sir Allen Stanford. The main game of the Series matched the English national cricket team against an all-star team from the Caribbean, called the Stanford Superstars....
prize after defeating Middlesex
Middlesex County Cricket Club
Middlesex County Cricket Club is one of the 18 major county clubs which make up the English and Welsh domestic cricket structure, representing the historic county of Middlesex. It was announced in February 2009 that Middlesex changed their limited overs name from the Middlesex Crusaders, to the...
on October 27, 2008.
In June 2008, Stanford and the England and Wales Cricket Board
England and Wales Cricket Board
The England and Wales Cricket Board is the governing body of cricket in England and Wales. It was created on 1 January 1997 combining the roles of the Test and County Cricket Board, the National Cricket Association and the Cricket Council...
(ECB) signed a deal for five Twenty20
Twenty20
Twenty20 is a form of cricket, originally introduced in England for professional inter-county competition by the England and Wales Cricket Board , in 2003. A Twenty20 game involves two teams, each has a single innings, batting for a maximum of 20 overs. Twenty20 cricket is also known as T20 cricket...
internationals between England and a West Indies all-star XI with a total prize fund of £12.27m (US $20 million) to be awarded to the team that wins the Championship. It was the largest prize ever offered to a team for a single tournament.
This was in jeopardy after a row with Digicel
Digicel
Digicel is a mobile phone network provider covering parts of Oceania, Central America, and the Caribbean regions. The company is owned by Irishman Denis O'Brien, is incorporated in Bermuda, and based in Jamaica. It provides mobile services in 26 countries and territories throughout the Caribbean...
, the sponsors of the West Indies cricket team, who were unhappy about sponsorship of the event. Eventually, the dispute was sorted out and the Championship was won by Stanford Superstars, who defeated the England team by 10 wickets, humiliating them in the Twenty 20 arena.
On February 17, 2009, when news of the fraud investigation became public, the ECB and WICB
West Indies Cricket Board
The West Indies Cricket Board is the governing body for professional and amateur cricket in the West Indies...
withdrew from talks with Stanford on sponsorship. On February 20 the ECB announced it has severed its ties with Stanford and cancelled all contracts with him.
Media
Stanford owned two newspaper businesses in both Antigua and BarbudaAntigua and Barbuda
Antigua and Barbuda is a twin-island nation lying between the Caribbean Sea and the Atlantic Ocean. It consists of two major inhabited islands, Antigua and Barbuda, and a number of smaller islands...
and Saint Kitts and Nevis
Saint Kitts and Nevis
The Federation of Saint Kitts and Nevis , located in the Leeward Islands, is a federal two-island nation in the West Indies. It is the smallest sovereign state in the Americas, in both area and population....
, which both went by the name of The Sun. Following the scandal, both newspapers put workers on notice that their full operations would cease in April 2010.
See also
- Caribbean Star AirlinesCaribbean Star AirlinesCaribbean Star Airlines was an airline based in Antigua and Barbuda. It operated scheduled passenger services in conjunction with Leeward Islands Air Transport to destinations in the eastern Caribbean...
- Caribbean Sun Airlines
- FBI
- Stanford 20/20Stanford 20/20The Stanford 20/20 Tournament was a cricket tournament in the Caribbean island of Antigua. It was held first in July and August 2006 in the West Indies at the Stanford Cricket Ground, St. John's, Antigua and Barbuda and the same place the year after...
- Stanford Cricket GroundStanford Cricket GroundThe Stanford Cricket Ground, colloquially known as "Sticky Wicket Stadium", is a cricket ground in Osbourn, Saint George Parish, Antigua. It was previously known as the Airport Cricket Ground, before it was taken over by Allen Stanford and rebuilt in 2004...
, Coolidge, Antigua - Laura Pendergest-HoltLaura Pendergest-HoltLaura Pendergest-Holt is an alleged Ponzi scheme artist financier and former Chief Investment Officer of Stanford Financial Group, who was charged with a civil charge of fraud on February 17, 2009...
- Ponzi schemePonzi schemeA Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
- LIAT
- Stanford Financial GroupStanford Financial GroupThe Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States authorities in early 2009....
External links
- Allen Stanford - Personal website (site inoperative as of 6/19/09) - Archive
- SEC website with details of Stanford case
- The Eastern Caribbean Central Bank regarding Stanford's bank in Antigua