A Deadbeat Banker
By JEFFREY ST. CLAIR
This is the story of a deadbeat banker. His name is Allen Stanford and he was once known as the $7 billion man. Now, he faces federal indictments that charge him with running a vast Ponzi scheme that bilked depositors out of billions.
Born in Mexia, Texas, the mysterious arc of Stanford’s career sees him rise from burger-flipping gym rat in Waco to globe-trotting banker, a lord of cricket, a friend (and travel agent) of politicians. His robust resume also includes strangely intimate histories with numerous female acquaintances (known in his circle as the “Outside Wives”), as well as the Drug Enforcement Agency.
Blinking stridently on the radar of federal investigators at various agencies for more than 20 years, Stanford’s banking empire was finally shut down in February by the Securities Exchange Commission, which claims, in self-congratulatory language, that Stanford’s fraudulent operations put the “integrity of the markets” at risk. Stanford and six of his partners now face an imposing list of charges, ranging from banking fraud to bribery of regulatory officials in Antigua to personal enrichment from the vaults of depositors.
Stanford, who was taken into federal custody by the FBI, denies all. He claims that the sudden insolvency of his banking operations stemmed not from embezzlement or fraud but from, in the words of his lawyer Dick DeGuerin, “the SEC’s heavy-handed actions.” Now there’s a first.
Left to sort their way through the rubble of Stanford International are more than 30,000 angry depositors, many from Latin America, who bought certificates of deposit, and other glittering financial instruments from Stanford-owned banks, only to discover, according to federal investigators, that Stanford had diverted large chunks of those deposits into his own accounts to support the familiar playthings of today’s high roller: personal jets, yachts, sports teams, restaurants, women and gaudy mansions, including a 57-room palazzo in Coral Gables that is ringed by a moat.
Still, connoisseurs of financial crimes–and perhaps even the principals, themselves–are scratching their heads as to why the Stanford case, with its rich veins of scandal, sex and villainy, has yet to generate the same kind of media and governmental outrage sparked by the crimes of that other master Ponzi-schemer, Bernie Madoff. Some speculate that Madoff picked the pockets of a finer class of clientele: movie stars, writers, socialites, charitable foundations Holocaust survivors. Stanford’s victims, on the other hand, were either Latin American or obscure residents of the Sun Belt with more new money than they knew how to handle. Others hint at an even darker narrative involving the fruitful and symbiotic relationship many off-shore banks in the Caribbean have enjoyed over the decades with certain secretive federal agencies.
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