California Lawyer Directory , Toledo Lawyers
Meet Texas Billionaire (And Mini-Madoff?) "Sir" Allen Stanford
By Zachary Roth - February 13, 2009, 11:49AM
We may have found our favorite mini- (or maybe not so mini-!) Madoff yet...
The FBI, SEC, and IRS are all looking into the business activities of the Stanford Financial Group, a Houston-based private investment group run by the "flamboyant Texas billionaire" Allen Stanford, reports the New York Times.
Like Madoff, Stanford's returns may have been too good to be true. A bank he owns, based in Antigua, has been issuing certificates of deposit that pay interest rates at more than twice the national average, says the paper.
Last summer, two former employees alleged in a lawsuit that the firm misled potential investors by overstating the asset value of individuals; failed to file mandatory forms disclosing its clients' offshore accounts; and removed information from its computers in response to an S.E.C. investigation.
The size of the alleged scam is unclear, but a spokesman for Stanford Financial told the Times that it "holds about $8 billion in deposits at its bank and has about $50 billion in assets in its wealth management affiliate."
The firm has denied the allegations.
But what really piqued our interest here was Allen Stanford himself. Here's some of the color the Times offers on the guy:
[A] decade ago, Mr. Stanford told The Associated Press that he had flown a Roman Catholic priest displaying signs of "stigmata," or bleeding wounds on his wrists and ankles, from the tiny Caribbean island of Antigua to New York City on his jet.
Mr. Stanford, who his firm said was unavailable for comment, ranked 205th last year on the Forbes annual list of the richest people in the United States, with an estimated net worth of $2.2 billion. On Antigua, he is akin to royalty, being knighted by the former prime minister, referring to himself as "Sir Allen Stanford" on the company's Web site.
And maybe most interestingly:
Mr. Stanford has claimed ties to Leland Stanford, the former governor of California who started Stanford University in the 1800s. The university, however, has said there is no genealogical relationship between the two.
Indeed, on that one, Stanford put his money where his mouth is. In 2001, he gave $2.5 million to help rehabilitate the Leland Stanford Mansion State Historic Park in downtown Sacramento. A press release sent out by the office of then-California governor Gray Davis noted: "Stanford traces his family heritage to the family of Leland Stanford."
The Times also notes that Stanford and his firm have "emerged in recent years as major contributors to various lawmakers, appearing to focus particularly on legislators considering bills that would change offshore banking rules."
So we took a quick look at online campaign finance records compiled by the Center for Responsive Politics -- and it's fair to say the paper wasn't exaggerating.
Over the last decade or so, Stanford or the Stanford Financial Group have given $128,500 to the RNC, $238,500 to the NRCC, over $80,000 to the NRSC, and $180,000 to the DCCC. They have also given smaller amounts to current or former members of Congress with leadership positions, or positions with oversight over the banking and financial systems. That lists includes Tom DeLay, Phil Gramm, Chuck Schumer, Richard Shelby, Charlie Rangel, Max Baucus, Bob Torricelli, and Paul Sarbanes.
We're guessing this won't be the last post we do on Allen Stanford.
Late Update: It looks like, despite being from Texas, Stanford is a cricket fan. Check out this story from the cricket website cricinfo.com, reporting that today's match between England and the West Indies in Antigua has been suspended because of a waterlogged pitch. Discussing alternative locations, the site adds:
Another option, as yet unvoiced, would be to shift the match to Sir Allen Stanford's private ground near the airport, the venue of the 20/20 for 20 in November.
He is a knight, after all.
Sites of Interest