Texas Millionaire and Antigua Resident in Billion Dollar Fraud Scheme

Texas financier R. Allen Stanford is accused of cheating 50,000 customers out of $8 billion dollars He was served with legal papers by FBI agents while sitting in a car in FredericksburgVirginia.



The Securities Exchange Commission alleges Stanford ran a fraud promising investors impossible returns, much like Bernard Madoff’s $50 billion alleged Ponzi scheme.

For now he is not under arrest, nor is he in custody. HE did have to surrender his passport.

The fallout from the fraud case is already rattling around the global financial system.

Venezuela on Thursday seized a failed bank controlled by Stanford after a run on deposits there, while clients were prevented from withdrawing their money from Stanford International Bank and its affiliates in a half-dozen other countries.

Stanford's father, James Stanford, told The Associated Press in Mexia, Texas, on Thursday that he hopes the allegations aren't true. "I have no earthly knowledge of it," said the elder Stanford, listed as chairman emeritus and a director for Stanford Financial Group. "I would be totally surprised if there would be truth to it. And disappointed, heartbroken."

Asked what advice he would give his son, Stanford, 81, said: "Do the right thing."

A little closer to home, Stanford, 58, ihas used his personal fortune — estimated at $2.2 billion by Forbes magazine — to bankroll institutions such as Bank of Antigua, he owned Caribbean Star Airlines and was money behind the 20/20 Cricket Tournament.

He owns a home in the U.S. Virgin Islands and operates businesses from Houston to Miami and Switzerland to Antigua, where he holds citizenship and the government knighted him in 2006 in recognition of his economic influence and charity work.

In an e-mail to his employees last week, Stanford said his company was cooperating with the probe and vowed to "fight with every breath to continue to uphold our good name and continue the legacy we have built together."

A federal judge appointed a receiver to identify and protect Stanford's assets worldwide, including about $8 billion managed by the Antigua-based Stanford International Bank, which has affiliates in Mexico, Panama, Colombia, Ecuador, Peru and Venezuela.

Also frozen were assets of Houston-based Stanford Capital Management and Stanford Group Co., which has 29 brokerage offices around the U.S.

I can't even picture the Galleria Mall in Houston without the huge gold letters of Standford Financial Group on the building. That guy was huge. I hope this is a lesson for many Caribbean governments. Let someone come down with an accent and a good enough story and we will sell them our land for half it's worth and even give them duty free concessions and bend over backwards for them. But let a local man come with the same idea, it's never good enough. All that glitters isn't gold!