" ... Lured by 'high rates that exceed those available through true certificates of deposits offered by traditional banks,' thousands of investors were indelicately relieved of their life savings. Of the more than $8 billion hoovered up by the banker and his cronies, only about $500 million has been recovered. ... Was it diverted elsewhere by the banker’s silent partners in a certain three-lettered agency? ... "
By Tom Burghardt
Dissident Voice | January 3, 2011
While R. Allen Stanford was happily ensconced on the Caribbean island of Antigua, allegedly bribing officials there as he expanded his banking empire, secret cables released by the whistleblowing web site WikiLeaks revealed that U.S. Embassy officials held themselves at arm’s length even as they provided the accused fraudster with political cover.
As Antifascist Calling reported last summer, Stanford International Bank and Stanford Financial Group (SFG), once conservatively valued at $50 billion, were no more legitimate than penny stock frauds or advance fee scams on the internet. To make matters worse, for years federal regulators turned a blind eye towards the bank’s reckless practices.
06BRIDGETOWN755, “Cricket Breakfast Serves Up First Encounter with Allen Stanford,” dated 03 May 2006, revealed that “Ambassador Kramer met controversial Texan billionaire Allen Stanford for the first time at an April 21 ‘Legends of Cricket’ breakfast in Barbados.”
As it turns out, so too did the U.S. Embassy.
The confidential embassy cable reported that “Stanford bent the Ambassador’s ear concerning his significant new tourism and property investments in Antigua and plans for his Caribbean Star and Caribbean Sun Airlines.”
The occasion for the meeting, an inadvertent encounter if the embassy’s account is to be believed, was an April 21, 2006 breakfast at the Barbados Hilton.
Stanford, who went on to donate some $20 million to the England and Wales Cricket Board, attended the lavish affair in the company of Barbados Prime Minister Owen Arthur, U.S. Ambassador Mary E. Kramer, assorted sports stars and local luminaries.
The cable averred that “Allen Stanford is a controversial Texan billionaire who has made significant investments in offshore finance, aviation, and property development in Antigua and throughout the region. His companies are rumored to engage in bribery, money laundering, and political manipulation.”
Rumored by whom, one might reasonably ask? An important point since this was certainly not general knowledge at the time, particularly amongst those who were being fleeced.
But rather than blowing the whistle when it could have mattered most to investors and Antiguan citizens, the Bush-appointed official took cover. “Embassy officers do not reach out to Stanford” we read, “because of the allegations of bribery and money laundering. The Ambassador managed to stay out of any one-on-one photos with Stanford during the breakfast.”
Why would Kramer have done otherwise? After all, as Secretary of State Hillary Clinton piously intoned last month denouncing WikiLeaks, “this is the role our diplomats play in serving America.”
A “Unique Investment Strategy”
When “Sir Allen” was arrested in 2009, the federal indictment charged that the high-flying Texan had sold more than $7 billion in fraudulent certificates of deposit and some $1.2 billion in mutual funds.
The centerpiece of SIB’s “unique investment strategy” were financial instruments that were claimed to be safe, liquid and redeemable at a moment’s notice.
According to a blurb on the “Sir Allen Stanford” web site, the Stanford Financial Group “provides private and institutional investors with global expertise in asset allocation strategies, investment advisory services, equity research, international private banking and trust administration, commercial banking, investment banking, merchant banking, institutional sales and trading, real estate investment and insurance.”
The reality was far different, however. In fact, the majority of Group “assets” were in very illiquid real estate holdings and private accounts managed by just two individuals, Allen Stanford and his college roommate, James M. Davis, the bank’s chief financial officer.
According to federal prosecutors, accounts were divided into three tiers, I, II and III with Tier III accounts representing “more than 80% of the purported total value of SIBL’s investments.”
“STANFORD and DAVIS” the charge sheet reads, “directed, managed, and monitored … the Tier III investments. According to internal SIBL documents, as of June 30, 2008, these Tier III investments comprised the majority of the purported value of SIBL’s investment portfolio. Approximately 50% of the purported value of Tier III (approximately $3.2 billion) included investments in artificially valued real estate and approximately 30% of the purported value of Tier III (approximately $1.6 billion) included notes on personal loans to STANFORD. STANFORD, DAVIS and others did not disclose to, and actively concealed from, investors, SGC and SIBL employees, and others the fact that approximately $4.8 billion in purported Tier III investments consisted of such artificially valued real estate and notes on personal loans to STANFORD.”
A sweet deal if you’re in on the fix.
Lured by “high rates that exceed those available through true certificates of deposits offered by traditional banks,” thousands of investors were indelicately relieved of their life savings. Of the more than $8 billion hoovered up by the banker and his cronies, only about $500 million has been recovered.
This raises the question: where did all that money go? Did it just simply vanish into thin air, secret Stanford accounts, or perhaps, was it diverted elsewhere by the banker’s silent partners in a certain three-lettered agency?
When asked during a 2009 interview by CNBC’s Scott Cohn whether he had been “helpful” to U.S. authorities in Latin America, Stanford replied, “Are you talking about the CIA?” Cohn: “Well, you tell me?” Stanford: “I’m just not going to talk about that.”
Stanford’s reticence to discuss possible Agency connections are certainly understandable.
We do know, however, that like many dubious banking ventures before it, Stanford Financial Group had powerful friends in high places, in the White House, Congress, amongst regulatory agencies and, plausibly, the CIA; all of whom tripped over themselves furnishing Stanford’s “family” of companies with a watertight “roof.” ... CONTINUED