STANFORD PROTESTS HIS INNOCENCE

STANFORD PROTESTS HIS INNOCENCE

In the face of fraud charges by the SEC, and impending criminal charges by the Justice Department, Texas banker Allen Stanford is maintaining his innocence.

“I would die and go to hell if it’s a Ponzi scheme,” he told ABC News in early April. “I’m fighting for my survival and for my integrity.”

It’s a fight insiders predict he will lose. Among other things, it is known that the FBI had been compiling criminal accusations against Stanford for more than 15 years. Furthermore, government prosecutors are known to be lining up former Stanford employees and offering plea bargains in exchange for testimony against Stanford. At least five of them are said to have lodged complaints of fraud with the SEC against Stanford during the period 2003-2008. Those complaints obviously fell on deaf ears, perhaps not surprisingly, seeing as how the Texas Bankers Association and former Senator Phil Gramm had enormous influence in the Bush White House.

According to someone inside the SEC, regulators were slow to react because of jurisdictional concerns.

In the wake of the Stanford and Madoff cases, Congress has announced plans to examine surveillance of the financial industry. President Obama has promised that tough new regulations will be put in place before the end of this year.

Stanford’s problems began with certificates of deposits issued by Stanford International Bank in Antigua. The SEC would normally have had jurisdiction over CD had they come from Stanford’s brokerages in the States. The fact that Stanford might have deliberately circumvented oversight by using the islands is part of the case against him.

That bank is now being liquidated. And regulators in Antigua have said publicly, “Stanford International’s assets were significantly less than its liabilities.”

In the meantime, the IRS is seeking $226.6 million in unpaid taxes from Stanford.

Born in Texas, Stanford became an Antiguan in 1999, the same year that he was appointed by the then Prime Minister Lester Bird to help rewrite the island’s offshore banking laws. The US State Department reacted to the new regulations by labeling Antigua “a money laundering risk.” Two years later, coinciding with George Bush’s arrival in the White House, that designation was lifted.