Wealthy investors across Latin America are believed to be among
the main victims under the $8 billion fraud case which the US
Securities & Exchange Commission has brought against the
financial empire of Allen Stanford.
At the centre of the flamboyant Texas-born billionaire’s alleged
swindle is the Antigua-based Stanford International Bank. The bank,
in an echo of the high and steady returns offered by $50 billion
swindler Bernard Madoff, aroused suspicions after offering
high-yielded certificates of deposit despite sharp declines in
global interest rates.
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Stanford’s financial advisers targeted wealthy investors in
Venezuela, Peru, Colombia, Mexico and Ecuador with promises of high
returns. In Venezuela alone, Stanford clients may have invested up
to $2.5 billion in offshore accounts as they attempted to shelter
money offshore from the leftist policies of president Hugo
Chavez.
The US Federal Bureau of Investigation is attempting to find out
how many investors have become enmeshed. However, many Latino
investors may be reluctant to come forward in case publication of
their identities may open them to targeting by kidnappers.
Stanford himself has invoked the Fifth Amendment in the US
courts, which allows him to remain silent to avoid incriminating
himself. The plea was in response to a civil case filed by the SEC
that accused the entrepreneur and two of his employees of
conducting a large-scale investment scam over many years.
Laura Pendergest-Holt, his company’s chief investment officer,
and James Davis, its finance director, are accused by the SEC of
paying investors returns from money placed with Stanford Financial
Group by new customers.
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By GlobalDataUnwinding the extensive international empire is likely to prove
messy and may result in years of court action, US lawyers
forecast.
Ralph Janvey, a Dallas lawyer, got US courts this month to
unfreeze 28,000 customer accounts – or about half of the estimated
50,000 accounts that Stanford had worldwide – in a bid to calm
investor anger over their sequestered assets.
In London, joint receivers Nigel Hamilton-Smith and Peter
Wastell from Vantis are handling the receivership of Stanford
International Bank and Stanford Trust Company.
John Evans
