Sir Robert Allen Stanford was born March 24, 1950 and is a prominent financier, philanthropist and sponsor of professional sports, who has been charged with fraud. Stanford is the chairman of the privately held, wholly owned Stanford Financial Group of Companies.

A fifth-generation Texan who resides in St. Croix, U.S. Virgin Islands, he holds dual citizenship, being a citizen of Antigua and Barbuda and a United States citizen. Stanford was the first American to be knighted by the Commonwealth Nation and was presented with the honor by the then Governor-General of Antigua and Barbuda, Sir James Carlisle.

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 was arrested by the FBI on June 18, 2009.

Business Activities

Stanford started in business in Waco, where he opened a body-building gym, but it failed. His first success in business was in Houston real estate 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 of 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, and 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.

Fraud Investigations

Reports surfaced in early February 2009 that the Securities and Exchange Commission, the Federal Bureau of Investigation, the Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority, 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.

Federal agents raided the offices of Stanford Financial on February 17, 2009, and are presently “treating 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” centred 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 prosecutors, 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 Venezuelan Government also took over local operations 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:

Federal agents in black SUVs surrounded his girlfriend’s house this afternoon, and just sat there. I told him to walk out and introduce himself. So he did, and he asked them, ‘If you’ve got a warrant, take me into custody. If you don’t, I’m going to Houston.’ And they did, so they arrested him.

On June 25, 2009, Stanford appeared in a Houston court and pleaded “not guilty” to charges of fraud, conspiracy and obstruction.

Tax liens

The US Court of Appeals for the Fifth Circuit, affirming much of a US 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 liens 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 laundering for Mexico’s Gulf Cartel.

Trademark infringement lawsuit

In 2001, Stanford said publicly that his great-great-great grandfather was a relative of Leland Stanford, 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. However, Stanford University denied there was “any genealogical relationship between Allen Stanford and Leland Stanford,” 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.”

Source – Wikipedia.org