Who Is Allen Stanford?
Robert Allen Stanford, who goes by Allen Stanford, is an American/Antiguan former banker that was convicted in 2012 of a Ponzi scheme following an investigation for securities fraud in excess of $7 billion. It was revealed that Allen Stanford had grossly misinformed his 50,000 investors about the level of professional management that they were receiving. Allen and his associates were also suspected of possible dealings with Mexican drug cartels.
- Allen Stanford is a former financier who was convicted of a Ponzi scheme in 2012.
- Stanford was convicted of a $7 billion fraud scheme involving certificates of deposit (CDs).
- Stanford's business was run from the island of Antigua, which knighted him in 2006 and then stripped him of knighthood in 2010 after he was arrested.
- Approximately 18,000 previous clients of Stanford have not seen any of their money returned.
- Not only were Stanford's clients hurt financially, but so was the population of Antigua as the nation heavily relied on Stanford's influence, investments, and employment.
- Stanford is currently serving a 110-year jail sentence in Florida.
Understanding Allen Stanford
Allen Stanford was convicted of selling $7 billion in fraudulent certificates of deposit (CDs) from his offshore bank, Stanford International Bank, on the island of Antigua in an international Ponzi scheme, a case that drew comparisons to disgraced broker Bernie Madoff’s multibillion-dollar fraud. Stanford's fraudulent scheme is the second-largest in history, only behind Madoff's.
Approximately 18,000 of his customers have not yet recovered their money, whereas a significant amount of Madoff's previous clients have. Stanford was first charged in 2009 by the Securities and Exchange Commission (SEC) and in 2012 was eventually convicted.
Once a billionaire and one of the richest men in America, Allen Stanford received a 110-year prison sentence in a 2012 ruling and has faced further indictments from the SEC in the United States. He has reportedly been attacked while serving his jail sentence and has consistently claimed that he is innocent and has been framed. He says that he is a scapegoat of the SEC after their mishandling of Madoff's case during the 2008 financial crisis.
In a lawsuit, Stanford's investors claim that in four instances and as early as 1997, the SEC determined that Stanford was running an illegal Ponzi scheme. Still, the agency did not act accordingly and failed to notify the Securities Investor Protection Corporation (SIPC). Investigators did not bring charges against Stanford until 2009, in the wake of the global financial crisis.
Stanford used the money that investors thought was going to CDs to finance his lavish lifestyle and make risky investments. Investors are claiming $24 billion in damages from the government of Antigua. However, not only were Stanford's investors severely impacted but so was Antigua.
Stanford was a large influence in Antigua. He developed much of the land, started a newspaper, a cricket stadium, and employed many people. He was in fact the island's largest employer. Once his empire crumbled and his employees lost their jobs, it had a trickle-down effect on the rest of the economy.
The previous employees cut spending and had to let go of their own hired help, further worsening the situation for Antigua.
Allen Stanford's Rise to Riches
Allen Stanford rose from humble beginnings in the town of Mexia, Texas. He was born in 1950 to a lower-middle-class family. Beginning as an insurance salesman and bookkeeper, Allen rose to be a successful investment manager, taking in billions of dollars in assets from both private investors and prominent figures in the political and sporting arenas.
After his early business ventures ended in failure, he founded Stanford Financial Group in 1991 in Antigua, laying the foundation of his empire and also becoming the island's largest employer. At its most successful, the Stanford Financial Group claimed clients from 140 countries with assets of $50 billion under management. By 2008, Stanford was one of the richest men in America, worth an estimated $2.2 billion and living an extravagant, jet-setting lifestyle in which he enjoyed power and privilege.
According to reports, in one three year period alone, Stanford spent $100 million on aircraft, which included helicopters and private Lear Jets. He even spent $12 million lengthening his yacht by just six feet.
Allen Stanford was knighted by the Antiguan government in 2006 and began utilizing the title "Sir"; but following his arrest and trial, his knighthood was stripped in 2010. Therefore, he can legally only go by his given name.