Allan Stanford Exposed After Madoff Fraud Scheme Collapsed

The SEC complaint filed in federal court in Dallas, Texas, said that the SIB is operated by a close circle of Stanford's family and friends. Its investment committee, responsible for the management of the bank's multi-billion dollar portfolio of assets, is comprised of Sir Allen; his father who resides in Mexia, Texas; another Mexia resident with business experience in cattle ranching and car sales; Pendergest-Holt, who prior to joining SFG had no financial services or securities industry experience; and Davis, who was also Sir Allen's college roommate.(Photo: sportingo.com)
The SEC complaint filed in federal court in Dallas, Texas, said that the SIB is operated by a close circle of Stanford’s family and friends. Its investment committee, responsible for the management of the bank’s multi-billion dollar portfolio of assets, is comprised of Sir Allen; his father who resides in Mexia, Texas; another Mexia resident with business experience in cattle ranching and car sales; Pendergest-Holt, who prior to joining SFG had no financial services or securities industry experience; and Davis, who was also Sir Allen’s college roommate.(Photo: sportingo.com)

As Bernard Madoff was arrested and charged with the world’s biggest scam on December 11, another billionaire was just 24 hours away from watching his own alleged fraud unravel before his eyes.

Among the millions of hapless investors, banks and charities who scrambled to discover how much they had lost to Mr Madoff was Allen Stanford, whose vast investment empire stretched across the US, the Caribbean and Latin America.

He was told on December 15 – less than a week after the alleged Madoff “Ponzi” scheme collapsed — that his firm had lost a relatively modest $400,000.

But the loss marked the beginning of the end for Mr Stanford. His business activities, which included a bank and a fund-management company, had already aroused the suspicion of his own clearing bank, Pershing, one of the world’s biggest financial institutions.

On December 12 Pershing had effectively thrown in the towel on Mr Stanford by ceasing to process any wire transfers for his investment firm because it had grown concerned about the lack of transparency in his business. Pershing had no idea who Mr Stanford’s clients were or how he made his money.

Mr Stanford relied on Pershing to process his commercial transactions. Between 2006 and December 2008, Pershing had sent to the Stanford Bank in Antigua about 1,635 wire transfers worth about $517million, from about 1,700 accounts.

As Mr Stanford allegedly lied to his anxious investors — telling them that his own businesses had no exposure to Mr Madoff — the American financial regulators had begun an investigation into Mr Stanford. It took them three months, until Tuesday afternoon, to charge him and two of his associates with fraud.

Apart from the obvious two connections between Mr Madoff and Mr Stanford – that one invested in the other and that both have been charged with fraud — they have a good deal else in common.

The investment schemes of both came to light primarily because of the slump in the US economy and the collapse of world stock markets. Mr Madoff’s alleged “Ponzi” scheme was laid bare after his own investors rushed to withdraw their savings, which they believed to have been held in stocks and shares.

Mr Stanford had run into trouble after big investments such as holdings in Florida property started to unravel.

The two alleged frauds are also similar in scale – though Mr Madoff’s victims believe that they lost about $50billion, far more than the $8billion fraud with which Mr Stanford is charged. And both have involved American, offshore and British financial regulators scouring the globe for assets.

Source: timesonline.co.uk

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4 Responses to Allan Stanford Exposed After Madoff Fraud Scheme Collapsed

  1. Interesting stuff…
    shame we aren’t hearing more about this guy in the main stream press..

  2. Pingback: Allen Stanford Was ‘US Government Informer’ « Bajan Global Report

  3. Pingback: Madoff Little Helpers Charged « Bajan Global Report

  4. Pingback: Extradition Request Expected For Antiguan Regulator In Stanford’s Case « Bajan Global Report

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