The Corporate Observer Blog : Consumer Protection, Corporate Abuse : Class Action Lawyer & Attorney : Steven Berk Law Firm

The defense will claim—get this—that the SEC's freeze of his assets led to the downfall of Stanford’s empire.

It’s finally showtime for one of the greatest grifters, flim-flam artists and con men of the century.  Yep.  Allen “who wants to play cricket with me” Stanford began his trial yesterday.  After a curious and all-too-convenient case of depression-induced amnesia, this cowboy finally stands trial for running a $7 billion Ponzi scheme.

So, who is to blame for the some 20,000 people who were robbed of their money?  What will be the theory of his defense?  Well, the regulators, of course!  Postponing his trial gave his defense team plenty of time to cook up a doozy of a strategy.  They must have taken a poll or something.  It’s the old claim, it’s all about those evildoers at the Securities Exchange Commission.  You see, after determining Stanford was a fraud (all those jets and private Caribbean Islands were a good clue), the SEC froze Stanford’s assets in 2009 and charged him with fraud.  The defense will claim—get this—that this freeze led to the downfall of Stanford’s empire.

Mr. Stanford, sorry to be the one to break it to you, but you cannot blame the regulators.  In fact, only one group really can—those who lost their money in what they believed were safe investments in certificates of deposit.  They have every right to blame the SEC and other financial regulators for letting you get away with this.  These regulators failed to act promptly and in the face of mounting evidence, turned a blind eye to the activities of Stanford’s firm until it was too late for many investors.

Well sit back and get comfortable, this is not going to be over any time soon.  P.T. Barnum—er, Allen Stanford—may just pull a rabbit out of his hat...

Assisted by Setareh Ebrahimian

• Print
• Comments
• Trackbacks

This is a tough one to be sure.  The law favors the banks but we applaud the DOJ for trying.  It strains credulity that a sophisticated banker wouldn’t know what was going on with the flamboyant Stanford.  If banks are held accountable, the Stanfords of the world won’t exist, or at least cannot flourish.

As if a bad case of depression was not enough to delay a trial and no doubt a lengthy prison sentence to follow, billion-dollar Ponzi schemer, cricket player and nobleman (by bribe not birth), Sir Allen Stanford, is now—get this—claiming he has amnesia.  Yep.  Can’t remember a darn thing, nothing, nada, before his arrest in June of 2009.  Not the jets, not the wine, not all those billions. How convenient...  I think my kids once tried to claim this once when the kitchen window was mysteriously broken.  For this Allen you receive a second Corporate Observer Chutzpah Award.

But what’s even more interesting than Mr. Sanford’s latest tactic is the game being played by his bankers at SG Private Banking (Suisse SA), a subsidiary of the Swiss giant Societe Generale.  Turns out, they seem to also have a case of amnesia.  “Allen Stanford, hmmm… name sounds very familiar, can’t place him though, do you happen to have a picture?”  According to a recent article in the WSJ, SG Private Banking is being investigated by the Department of Justice for the vast assistance it provided Sir Allen.  Apparently, he had a secret numbered bank account at SG where he was able to tap directly into a hundred-plus million dollar account to fund his lavish lifestyle (that would be an understatement) and pay bribes to his Antiguan auditors and bank regulators.

You know those Swiss, they never said a peep, even though this stunk all the way to Basel.  The US Department of Justice wonders “what they knew and when they knew it.”  No doubt the bankers will say, “we were merely providing banking services.  How can we be expected to police and guarantee all of our customers?”  But it shouldn’t be that easy to avoid liability.

Think back to the 1920s when the likes of John Dillinger and Pretty Boy Floyd roamed the land “hitting” banks with reckless abandon.  Historians now surmise that many of these seemingly well-planned and courageous capers were “inside” jobs.  Someone (likely mob connected) opened the back door of the bank for these fellas or they were tipped off when money would be arriving and the guards would be on a smoke break.  That assistance, despite being subtle and carried out without a mask and gun, was nothing short of substantial given the circumstances.

This is a tough one to be sure.  The law favors the banks but we applaud the DOJ for trying.  It strains credulity that a sophisticated banker wouldn’t know what was going on with the flamboyant Stanford.  If banks are held accountable, the Stanfords of the world won’t exist, or at least cannot flourish.

Stay tuned.

• Print
• Comments
• Trackbacks

Allen Stanford, accused perpetrator of a $7 billion Ponzi scheme has convinced a federal judge to postpone his criminal trial for reason of incompetence. Why is this man incompetent to withstand trial? Depression.

Depression is a serious disease affecting millions around the world. In many cases the disease can make simple tasks like making breakfast or tying one’s shoes nearly impossible. The unfortunate reality is that more than a few of Stanford’s victims are feeling this way.  They have lost their life savings; retirement has become impossible, and for many the pure shame of being a victim is a badge of dishonor that will follow them for the rest of their lives.  For these victims, and any other individual suffering from depression, the world doesn’t wait – it simply continues turning, often worsening the condition.

But Mr. Stanford, who swindled thousands with bravado and reckless abandon (private jets and polo ponies for everyone) and robbed the public of its ability to trust the financial system gets a break, some time to recuperate.  Did Stanford pause his fraud when his victims became depressed?

The constitutional protections afforded criminals are at the heart of any democracy ("innocent till proven guilty") and should remain sacrosanct.  But when "depression"  brought on by the fact that you stole $7 billion from innocent investors, is your excuse, I have to draw the line and side with the prosecutor and aggrieved investors.   "Mr. Stanford it's time to admit your guilt (which is obvious to all) or go to trial today to clear your "good name".

• Print
• Comments
• Trackbacks