Former Stanford Company director to appeal ruling

ST JOHN’S, Antigua – Former Stanford Development Company (SDC) Director Barbara Street will be appealing a recent and second High Court judgment that SDC has no properly constituted Board of Directors, and therefore she is not a director.

In her ruling, Justice Pearletta Lanns said Street should cease to describe herself as SDC’s director given that “at best, her directorship expired in 2010.”

Apart from challenging the ruling, Street is also appealing a decision of the Registrar of Companies who denied her application to resume directorship of SDC.

“We have filed an application to compel the registrar to act upon the filing because we have made an application to the registrar since last year and she had not responded,” said Hugh Marshall Jr, who is Street’s attorney.

He said directorships expire every year and have to be reappointed.

“We have done that but the registrar has not accepted any of the filings and hasn’t stated why,” he added.

Justice Lanns’ decision arose out of a claim filed by Stanford International Bank (SIB) (acting through its joint liquidators Marcus Wide and Hugh Dickenson).

For a full and open debate on the Stanford Receivership visit:

The Stanford International Victims Group Forum


Allen Stanford: From Billionaire to Inmate

The case of Allen Stanford, a former billionaire who once allegedly sealed a deal with blood and is currently serving a 110-year federal prison sentence, could soon be back in the headlines. A federal judge ruled last month that investors could proceed with a lawsuit that alleges the Securities and Exchange Commission (SEC) was negligent in its handling of the fraud.

 Texas-born Robert Allen Stanford exuded wealth. At his height in 2008, he was one of the richest men in America, listed on the Forbes 400, and worth an estimated $2.2 billion.

He defined conspicuous consumption. In one three year period alone, he spent $100 million on aircraft, which included helicopters and private Lear Jets. He even spent $12 million lengthening his yacht by just 6 feet.
As it happened, however, Stanford indulged in these perks with ill-gotten gains. In early 2009, the scale and scope of Stanford’s extravagances finally caught up to him.
Stanford was eventually convicted of selling fraudulent certificates of deposit from his offshore bank on the island of Antigua in an international $7 billion Ponzi scheme, a case that drew comparisons to disgraced broker Bernie Madoff‘s multibillion dollar fraud. To date, none of the more than 20,000 investors he bilked have recovered any money.
In their lawsuit, the investors claim that on four instances and as early as 1997, the SEC determined that Stanford was running a Ponzi scheme. Still, the agency did not act accordingly and failed to notify the Securities Investor Protection Corporation. Investigators did not bring charges against Stanford until 2009, in the wake of the global financial crisis.

The government moved to dismiss the case, but U.S. District Judge Robert Scola rejected the motion. He ruled that if the SEC knew Stanford was running a Ponzi scheme as alleged by plaintiffs, the agency was obligated to report it. Scola added that the government could argue that it did not know Stanford was running a fraud if and when the case moved to summary judgment.
SEC spokesman John Nester declined to comment to “American Greed.” Nonetheless, the attorney for the investors, Gaytri Kachroo, said the ruling was significant. “It truly provides the investing public a precedent and therefore the hope that a case against the SEC can succeed if meritorious under the law,” the lawyer said.

 A Conman’s Bogus Empire of Epic Proportions
Beyond fancy toys, Stanford bought a small island for $63 million. He owned mansions in Houston, Antigua, and St. Croix. And in Coral Gables, Fla. an enormous 18,000 square foot castle. It was fit for a king: the property included 57 rooms, a tower and a moat. Yet after just one year of living there, he grew tired of the sprawling estate – moving out and having it demolished.

He also loved the game of cricket. By 2008, he was considered the world’s number one promoter of the sport, even offering up a $20 million cash prize, the largest ever for a team sporting event, for a match in London.

Yet according to the U.S. Attorney’s office, Stanford was not playing with honest money. He got it by siphoning off loans to himself, approximately $2.2 billion from depositor’s CD holdings, without ever revealing these loans to investors.

From Brash Texan to Big Money Banker
Stanford grew up in a small town 90 miles south of Dallas. Much like his home-state, everything about the man was Texas-sized.

Doug Birdsong, who used to workout with Stanford, recalled him as a muscular man, standing 6’5″ and weighing about 330 pounds. “He was the biggest, he was the best, and he was the boss,” Birdsong told “American Greed.”

His early business ventures ended in failure. After losing a string of health clubs to bankruptcy in 1982 and racking up $13 million in personal debt, Stanford took a few more stabs at entrepreneurship before heading to the Caribbean, where he first entered banking.
He founded “Stanford International Bank” in 1991 on Antigua. It was there that he laid the foundation of his empire, becoming the island’s largest employer.
He targeted wealthy Latin Americans worried about the stability of their governments, and it worked. Within three years, the bank’s assets skyrocketed to $350 million.

One year later, he moved into the U.S. market, establishing Stanford Financial Group in Houston. The company became known for selling certificate of deposits (CDs). Synonymous with safety, CDs seemed like a smart choice for potential buyers. As Stanford’s investors piled into these instruments, in less than a decade the group grew to $3 billion.

Unwitting investors, however, had no idea that Stanford’s CDs were anything but safe.

A Scam from the Start

Yet suspicions rose in 2005 when SEC investigators began taking a hard look at Stanford Financial Group, specifically his Certificates of Deposit from Antigua. Three years later, when two whistleblowers came forward, the agency was handed hard proof of Stanford’s fraud.
Assistant U.S. Attorney Paul Pelletier got the case from the SEC. He landed a huge break when Jim Davis – Stanford’s right-hand man since the 1980’s and the company’s chief financial officer – agreed to talk in exchange for a reduced sentence.
Davis confessed that from his first day on the job, the company simply made up numbers and cooked the books. “That’s what his job was as CFO, and he continued to do that from 1987 or ’88 all the way until 2009,” Pelletier said.

When they first started the business, Davis said Stanford could do whatever he wanted on Antigua. He had the island’s chief banking regulator in his back pocket. In a bizarre twist, the two even sealed a bribery scheme deal by becoming “blood brothers,” cutting their fingers to mix their blood, according to Davis.

A decade-and-a-half after Stanford Financial Group first opened its Houston headquarters, the SEC shut its U.S. operations down. In June 2009, Stanford was mired in charges of fraud, conspiracy to launder money and conspiracy to obstruct justice.

Throughout his trial, however, the former high-flying billionaire steadfastly maintained his innocence. He attempted to put the blame on Davis, but a jury did not buy his story. This March, he was found guilty on 13 counts, and later sentenced to more than a century in prison.

Investors Devastated by Economic Homicide
Many of the investors at the sentencing were satisfied, with Sandra Dorrell being one of them.
In 2005, after selling off an office furniture business, she invested her money in the Stanford Group’s CDs. A single mother who was battling a rare, life-threatening condition called Caroli’s disease, she had planned to use her investment to give her peace of mind and financial security as she endured medical treatment.
Instead, she lost every penny.
“To lose $1.3 million to someone that absolutely stole the money from me is just horrific,” Dorrell told CNBC’s “American Greed.”
Fellow investor Cassie Wilkinson, who along with her husband lost six-figures to Stanford’s treachery, agreed.
“The sentencing for crimes like this has become so big and so long that they’re comparing it to economic homicide, and really, that’s what it is,” she said. “Someone murdered the life that I knew, that I worked hard for. We were not born with money; we earned every single penny,” Wilkinson added.
For 62-year-old Stanford, a projected release date of 2105 is a life sentence -one that he deserves, according to many of his victims.

The Allen Stanford Story Doesn’t End With The Guilty Verdict

Thursday, March 15, 2012

Prominent local attorney, Lee Davis, offered several interesting comments on the Allen Stanford trial and the recent “guilty” verdicts handed down on 13 of 14 charges of criminal conduct. This sordid story does not end with these verdicts, not hardly.

A mere piker compared to Madoff,s roughly $68 billion Ponzi scheme, Stanford and his cronies fleeced investors around the globe for approximately $7 billion.

But far more damage lies beneath the surface of this oil spill of greed and avarice. Where were the federal regulators? Missing in action? Where were the Antiguan authorites? Bought and sold? Numerous complaints and reports given to various federal agencies, the SEC, FINRA and NASD, fell upon blind eyes and deaf ears. In fact, one of FINRA’s district directors, Bernerd Young, became managing director of Compliance for the Stanford firm. Leroy King, former director of Antigua’s Financial Regulatory Commission, stands indicted on many related charges, but has yet to be extradited.

Many doubt that Baldwin Spencer, Antigua’s Prime Minister, will sign the extradition order. His vocal pledges of cooperation are at odds with his inability to act on the matter. As with the Madoff aftermath, various federal agencies are feuding and finger pointing, the victims are struggling to recover lost funds and wondering who, if anyone, cares about their rights and losses. This ain’t cricket.

PM: King extradition a work in progress

ST JOHN’S, Antigua – Prime Minister Baldwin Spencer, who also holds the External Affairs portfolio, is awaiting a response from Leroy King to determine how he will proceed with an extradition request from the United States government.

The United States Securities and Exchange Commission charged King, former head of the Financial Services and Regulatory Commission (FSRC), with 21 counts relating to wire, mail and securities fraud and conspiracy to commit money laundering.

The charges relate to an alleged $7 billion Ponzi scheme said to have been masterminded by R Allen Stanford.

High Court judge Mario Michel, last week, upheld a 2009 committal order for King to be extradited.

The ruling placed the matter in Spencer’s hands, under his external affairs mandate.

Spencer said he has followed the steps in the Extradition Act by writing to King.

OBSERVER understands this was done last Friday. The law gives King 15 days to respond.

“There are some preliminary steps that have to be taken in that regard. The individual has to be written to, informing him that the courts have ruled in a particular way and that he should be given some time to respond to that.

“He may have reasons that he wishes to advance as to why he probably should not be extradited. According to the law that process has to take place.

“I have done the initial thing – that is to write to him indicating certain things and to request of him to respond. It’s at that point I will have the opportunity to make the final determination,” Spencer said.

The prime minister declined to comment on the Stanford trial, which began on January 24 and which has already heard testimony from witnesses, at home and abroad, about how the Texan exerted influence on those who should have been the gatekeepers.

Spencer was cautious, saying that he, like the rest of the world, is waiting to “see how things unfold.”

“I am not in a position to make any judgment or assessment of the situation,” he said.

Stanford, once the largest private sector employee in Antigua, was charged with 21 federal criminal counts. He pleaded not guilty to a revised 14-count indictment and said that if his company was involved in any illegal activity, it was the fault of his former chief financial officer, James Davis.

Davis, the prosecution’s star witness, has pleaded guilty to three counts:
conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct an SEC investigation.

Regulator recalls Stanford’s job offer

By Terri Langford
Thursday, February 9, 2012

The day after Paul Ashe took a post as a bank regulator in Antigua, R. Allen
Stanford called him with an offer for a job that would make him “a very
happy man” for the rest of his life, Ashe testified Thursday in Stanford’s
fraud trial.

Ashe, supervisor of international banks for Antigua’s Financial Services
Regulatory Commission, indicated he quickly ended the conversation with
Stanford in February 2008, did not know what job Stanford was proposing and
didn’t follow up.

Later that year, Ashe participated in an examination of Stanford
International Bank in the Caribbean island nation and eventually came to
doubt the accuracy of its financial reports.

He also described panic among depositors in February 2009, when a U.S.
lawsuit against the bank’s parent company, Houston-based Stanford Financial
Group, froze the assets of all Stanford properties.

“It was total chaos. The customers were screaming for their money,” Ashe
told the jury in U.S. District Judge David Hittner’s court.

Stanford, 61, a Mexia native, is accused of running a $7 billion investment
scam, largely through certificates of deposit issued by Stanford
International Bank.

Among the allegations are that investors were told the bank passed muster
from regulators and an independent auditor, and that an auditor and
regulator received bribes in exchange for those favourable reports.

Ashe said that he served during part of the tenure of the regulator accused
of taking bribes, Leroy King, former head of the Financial Services
Regulatory Commission.

Super Bowl tickets

Ashe testified he was unaware of under-the-table cash payments or gifts of
Super Bowl tickets King is accused of taking and said that Antiguan law
prohibits regulators from accepting gifts worth more than $50.

King is charged in a separate indictment, along with three Stanford
Financial officials, all to be tried later.

Ashe also described his own efforts to examine the bank in his official

He said that after weeks of “hardball” from the bank resisting meetings with
regulators, a team of half a dozen met with bank officials in September

“We wanted to see how Stanford International Bank was actually making its
money,” Ashe said. He said he was surprised by the paucity of documents
detailing oversight by the bank’s board.

He also said he was concerned by loans from the bank to Stanford, which he
wasn’t sure were supported by the cash reserves required under Antiguan law.

According to testimony by previous witnesses, the bank loaned Stanford
millions of dollars for his personal use and business ventures, even though
investors in the CDs were told their deposits were invested conservatively
and not used for such lending.

Fleet and estate

Jurors also got a description Thursday of Stanford’s luxurious life, as a
personal assistant described his fleet of vessels and estate in St. Croix,
U.S. Virgin Islands.

“He always liked having the best,” said Kelly Taylor, who, along with her
then-husband, worked for Stanford for several years. At one point their
tasks included overseeing the $13 million renovation of the Sea Eagle, a
106-foot yacht Stanford purchased for $4 million and extended to 112 feet.

The two-year renovation in the Netherlands began in 2003, Taylor said. She
and her husband spent time there, and Stanford visited at least once to
inspect the progress.

Stanford’s other vessels included a 180-foot rescue tug that Stanford bought
to support the Sea Eagle, a 55-foot “weekend boat,” and a 30-foot fishing
boat, Taylor said.

Difficult boss

She described Stanford as a difficult boss, and said she and other employees
jokingly referred to their jobs as “stand by to stand by” because they
always were on call to respond to his often-changing demands.

She also detailed quirks including his insistence that dry cleaning be sent
from St. Croix to Florida or Texas, and that water be shipped in. She said
she once was tasked with finding koi of a certain size and colour to stock a pond for a cricket tournament in Antigua.