Montag, 27. Juli 2009

Texas Department of Banking

July 27, 2001 Texas Banking Commissioner And Antigua & Barbuda International Financial Sector Regulatory Authority Sign Agreement On Information Sharing.

The Texas Banking Commissioner and the Antigua & Barbuda International Financial Sector Regulatory Authority announce the signing of an Agreement on Information Sharing between the two financial institution supervisory authorities. The agreement provides for information sharing and efficient supervision for jointly supervised financial institutions.

The Agreement on Information Sharing is the first between the State of Texas, the Texas Department of Banking, and a foreign government regarding the supervision of financial institutions. The agreement is the culmination of more than a year's effort between the two banking supervisory authorities.

"Our goal is coordinated comprehensive supervision," said Texas Banking Commissioner Randall S. James today. "This document represents a landmark in cooperation between financial institution supervisory authorities of the State of Texas and a foreign government. It underscores that seamless supervision of both Texas State-chartered financial institutions with offices in other countries and foreign institutions with offices in Texas can be achieved."

The Executive Director of the Antigua and Barbuda Authority, Althea Crick, hailed the agreement as "an instrument of benefit to the supervisory authorities of both Texas and Antigua and Barbuda which will be able to share information about any Antigua and Barbuda or Texas banks operating in both jurisdictions in the interest of all parties including depositors."

"As international commerce becomes commonplace, closer cooperation between nations is essential on matters relating to banking and financial institutions," said Secretary of State Henry Cuellar. "The agreement that the Texas Banking Commissioner has signed with fellow financial institution supervisors in Antigua and Barbuda should serve as a model for similar agreements and as a preview of the kind of information sharing that will be increasingly common in the Global Century."

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Freitag, 24. Juli 2009

Stanford's Shredded Florida Papers Being Reassembled

Shredded documents seized from R. Allen Stanford's South Florida offices are being pieced back together by prosecutors probing allegations the Texas financier ran a $7 billion Ponzi scheme.

U.S. Magistrate Judge Barry Seltzer of Fort Lauderdale, Florida, said federal prosecutors told him yesterday that within the next two months they will have "re-assembled the contents of three bags of shredded documents," according to a report posted today on the court's Web site.

The shredded evidence will initially be used against Bruce Perraud, a former Stanford Financial Group security specialist who is charged with destroying documents after an investigation began. Perraud's trial date, set for Aug. 24, will probably change to accommodate his lawyer's vacation plans, Seltzer said.

Stanford, four of his executives and Antigua's former top banking regulator are charged with defrauding investors of as much as $7 billion through bogus certificates of deposit sold by Antigua-based Stanford International Bank. The charges mirror U.S. Securities and Exchange Commission civil claims filed against Stanford and three of his companies on Feb. 17.

Perraud, who isn't accused of participating in the alleged fraud, worked at Stanford's Fort Lauderdale office, according to an indictment unsealed in June. Prosecutors claim Perraud told a document-shredding company to destroy a 95-gallon bin full of papers on Feb. 25, a week after a Texas judge presiding over the SEC case issued an order forbidding the alteration, removal or destruction of Stanford Financial records.

Edward Shohat, Perraud's lawyer, said in a July 22 telephone interview that his client intends to fight the charge.

Prosecutors told Seltzer that, in addition to the reassembled shredded documents, they intend to use six seized computer hard drives as evidence against Perraud.

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Freitag, 17. Juli 2009

Stanford "was informant for US anti-drug agents"

RAS indicted July 17, 2009

Sir Allen Stanford, the Texan billionaire who ploughed millions of pounds into English cricket, may have been working as an informant for American anti-drug agents in return for official protection which gave him free rein to run his banking empire, it emerged yesterday.

An investigation into the financier has found that just $500m (£331m) of the claimed $7.2bn of deposits held by his Stanford International Bank, based in Antigua, has been traced by a UK-based receiver who was called in by authorities when fraud allegations were laid against Stanford in February.

The resulting $6.7bn hole in the bank's balance sheet, which leaves 28,000 depositors - including 200 Britons - with near-worthless investment certificates, raises serious concerns about the extent to which officials in America and Britain were aware of Stanford's personal finance issues and the activities of his banks long before the current economic crisis.

Sir Allen Stanford, the Texan billionaire who ploughed millions of pounds into English cricket.
A BBC Panorama programme, to be screened tonight, alleges that the 6ft 4in-tall businessman may have been allowed to run his banking business unfettered for up to a decade because he was passing information on to America's Drug Enforcement Administration (DEA) about the money-laundering activities of drug baron clients from Colombia, Mexico and Venezuela.

His status as a confidential informant could have secured Stanford a degree of protection from financial regulators such as the US Securities and Exchange Commission (SEC) and may explain why a SEC investigation into his dealings in 2006 was quietly dropped following a request by another American government agency.

A source close to the DEA told Panorama: "We were convinced that Stanford's bank attracted millions of narco-dollars but it was very difficult to get the evidence to nail him. The word is that Stanford has been a confidential informer for the DEA since at least 1999."

Confidential documents show the British Foreign Office and the American authorities also knew as early as 1990 that Stanford, who was once listed as the 205th most wealthy man in the United States with a personal fortune of $2.2bn, had been made personally bankrupt in 1984 after his first business, a chain of health clubs, went bust.

British authorities ceased their investigation into Stanford after he moved his operations from the volcanic island of Montserrat, a British overseas territory, to Antigua, which has been independent from the UK since 1981.

Stanford, shot to prominence last year when he signed a multimillion-dollar deal to sponsor a Twenty/20 cricket tournament, culminating in a $20m match between England and an all-stars West Indian team. The billionaire was famously allowed to land his helicopter on the hallowed turf of Lords.

He vigorously denied all allegations of wrongdoing when the SEC froze his assets and accused him of orchestrating a "fraudulent, multibillion-dollar investment scheme" which effectively used the money of new investors to pay large dividends to existing depositors. The Texan has vowed to return money to all depositors and ruled out running a pyramid scheme.

The Foreign Office said it was not responsible for the investment decisions of individuals. But a spokesperson said: "The UK Government does take financial malpractice very seriously."


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Mittwoch, 15. Juli 2009


July 15, 2009
By Stanford Victims Coalition
Dear President Obama,

We are the victims of what has been alleged to be one of the most fraudulent, politically corrupt,and criminal financial operations in history. We are the innocent investors who fell through the cracks of the US financial regulatory structure. We lost our entire life's savings to a largely unregulated financial broker dealer headquartered in the United States of America – Stanford Financial Group.

The Stanford scandal has devastated the lives of thousands of victims from around the world including 35 states in the US and 60 countries. The victims are people who did everything right and our life's savings totaling $7.2 billion is now gone. We are retired school teachers, war veterans, small business owners, and honest, hard-working people who took every possible step to ensure the safety of our retirement funds. We did not simply make bad investments. We relied on the information provided by our financial regulators and our licensed financial advisors – all of which pointed to a healthy and growing American financial institution.

For over two decades, the Stanford Financial Group and its various entities, including Stanford International Bank-Antigua, were able to operate without adequate oversight by numerous government agencies charged with protecting us. Multiple US government agencies had knowledge of Stanford's alleged fraudulent business practices and corruption within the government of Antigua, yet Stanford investors were never warned. The US State Department, the Department of Justice, the US Treasury, the SEC and FINRA all had considerable evidence to warn investors and to take actions to protect investors dating back to at least 1999.

In the aftermath of the SEC's February 2009 raid of Stanford's offices, we have learned that the US sat back and allowed a financial institution to take in billions of dollars in IRAs, ERISA pension plans, college funds and general life's savings despite well-documented internal evidence that should have warranted enforcement actions on multiple fronts, but instead resulted in the endorsement of Stanford by numerous members of Congress and even at the highest echelons of the US government.

The Stanford victims are collateral damage - caught between the "massive ongoing fraud" alleged by the SEC and the lack of government action on a national and international level that would have saved us from devastation.

President Obama, you have taken extraordinary measures to help put America on a path to financial recovery, yet thousands of financial fraud victims are now becoming burdens on their families and the government because the US government has not been accountable for its actions and inactions. Our request of you is, at a minimum, to ensure the US government discloses what really happened with the Stanford Financial Group and how such an intricate scheme was able to infiltrate the global financial system and ruin the lives of so many innocent victims.

The entire world is watching how the American regulatory and legal systems will handle the debilitating losses of innocent victims of alleged financial fraud like the Stanford case. These victims have been denied the SIPC insurance coverage we legally qualify for and now face a long road to what appears to be an extremely limited recovery. The American financial system cannot afford to convey the message that defrauded investors in the US and abroad will be deprived of the right to have their life's savings protected. We are the prime example of the need for regulatory reform – and a plan to compensate victims when the system fails.

We ask the US government to explore all options to help Stanford victims recover their losses and to address the legislative need for compensation for those who suffer catastrophic losses when compliance requirements are not appropriately enforced by government regulators. We are not asking for a bailout – we simply want to get back what is rightfully ours.

Visit the Stanford International Victims Group - SIVG official forum

Montag, 13. Juli 2009

Class Action Suit filed against Antigua

July 13, 2009
By Peter Morgenstern
A major international class action lawsuit was filed today by attorney Peter Morgenstern on behalf of all Stanford International Bank-Antigua victims. The suit is against the Commonwealth of Antigua and Barbuda for claims of $24 Billion under the RICO Act, which entitles plaintiffs to seek treble damages of 3 times the actual losses. Some of our SVC members are named as plaintiffs along with victims from 6 or 7 different countries and will represent all victims in the "class." The case was filed in the US District Court in Houston. All victims are part of the suit and there is no need to "sign up."

Here is an excerpt from the suit:

This is an action to recover billions of dollars of losses suffered by innocent and unsuspecting customers from around the world who entrusted their money to R. Allen Stanford's Stanford International Bank, Ltd. ("SIBL"), part of the Stanford Financial Group ("SFG"), which has now been exposed as one of the most notorious, fraudulent, corrupt, and criminal enterprises in history.

Antigua is sovereign, but not above the law. It became a full partner in Stanford's fraud, and reaped enormous financial benefits from the scheme. Stanford stuffed Antigua's coffers – and its officials' pockets – with money stolen from unsuspecting customers throughout the United States, Canada, Central America, South America, and elsewhere. Antigua worked tirelessly to protect and nurture Stanford's criminal enterprise and, in return, eagerly accepted its share of criminally-procured funds.

Stanford's massive fraud would not have been possible without the active, knowing, and essential assistance of Antigua. Antigua: (i) provided a safe haven for Stanford to operate; (ii) provided essential assistance in Stanford's efforts to portray itself to Plaintiffs and other members of the Class as a legitimate provider of financial services; (iii) participated with Stanford in a variety of commercial activities in Antigua that provided a pretext for the transfer of criminal proceeds from Stanford to Antigua; (iv) provided false and fraudulent information to the Securities and Exchange Commission ("SEC") and other regulators in order to thwart the SEC's investigations into Stanford; and (v) shared in the criminal proceeds of the conspiracy, all or substantially all of which were stolen from the Plaintiffs and other members of the Class.

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Sonntag, 12. Juli 2009

HSBC acted as Correspondant Bank to Stanford

July 12, 2009
While no Stanford financial company had any presence in the UK, they used the British banking system through HSBC London as their correspondent bank for all deposits in Sterling and Euros.

Most people around the world are aware of HSBC bank. HSBC gave SIB an aura of respectability which simply wasn't appropriate or warranted.

Having looked at the money laundering regulations introduced throughout the European Economic Area (EEA) in 2007 which were passed into British law as Statutory Instrument 2007 number 2157, there are a couple of points to be noted:

1) The regulations state: A credit institution ("the correspondent") which has or proposes to have a correspondent banking relationship with a respondent institution ("the respondent") from a non-EEA state must—(a) gather sufficient information about the respondent to understand fully the nature of its business; (b) determine from publicly-available information the reputation of the respondent and the quality of its supervision. As you may be aware, the British government had revoked the banking license of Alan Stanford's Guardian International Bank situated on Montserrat which would usually undermine one's "reputation" in banking. Further SIB was audited by an unknown auditor.

2) The regulations also state: A credit institution must not enter into, or continue, a correspondent banking relationship with a shell bank….A "shell bank" means a credit institution, or an institution engaged in equivalent activities, incorporated in a jurisdiction in which it has no physical presence involving meaningful decision-making and management, and which is not part of a financial conglomerate or third-country financial conglomerate. You might be aware that the US receiver has issued a statement indicating that the mind and management of SIB was solidly placed in the US and not in Antigua. Further SIB was not part of Stanford Financial Group. It was an affiliate.

While there is little doubt that the subtleties of the Stanford situation have only come to light after the US Securities and Exchange Commission's freeze on all Stanford assets, the Uk governemnt were aware that this "bank" was being monitored and were in fact monitoring SIB them selves. HSBC is an enormous bank with many more resources to hand than individual investors. Further, agreeing to be a correspondent bank for all Euro transactions with a bank outside of the EEA should add an additional responsibility to undertake thorough due diligence given the ability to transfer funds freely within the EU and EEA.

How was it possible for HSBC to have become the correspondent bank for all Sterling and Euro deposits given the exercise of due diligence expected from correspondent banking with offshore entities and the history that Allen Stanford had with the British banking authorities.

The Foreign and Commonwealth Office comments to the recent BBC Panorama programme on Alan Stanford said that the "UK government does take financial malpractice very seriously and issues regular advice on countries and jurisdictions where there may be serious deficiencies in regulation. It is for companies and the financial professionals they employ to act on this advice with all due diligence". Presumably, the last part of this comment would apply to HSBC.

There have been many blunders it seems in the case of discovering what was at the heart of Allen Stanford's financial empire. We, as UK depositors with the bank, can only hope that all of those involved will participate in helping us recover our investments. One part of this is for HSBC (and the various insurance policies it holds) to step up to its part in the scheme and to assist those who deposited funds through them.

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Sonntag, 5. Juli 2009

R. Allen Stanford and Miami-based Greenberg Traurig

John Ellis Bush July 5, 2009

Miami Herald runs an excellent story on R. Allen Stanford (charged with multi-billion fraud) and a new angle: the stage was set for Stanford's multi-billion fraud in 1998, the year Stanford persuaded Florida banking regulators to grant his company special rights to open a Miami office outside the scrutiny of federal banking regulators. In this unique instance, Sanford was represented by Greenberg Traurig.

"There was no lawful way that office should have been opened", said Richard Donelan, the state's chief banking counsel who opposed the deal.

1998, the year Jeb Bush was elected governor of Florida. That year and that election set the stage for the the biggest boom in housing and construction in Florida history, now in ruins. Jeb won in South Florida, and primarily through the coordination of his base constituency (builders and developers) and as a result, Miami is the epicenter of the housing bust.

This is the place the gears of the machine all lined up to mesh Wall Street financial motive with political levers at the most intricate level of decision making, from state authority to local zoning allowing unsustainable growth.
John Ellis "Jeb" Bush (* 11. Februar 1953 in Midland, Texas) ist ein US-amerikanischer Politiker (Republikaner) und war von 1999 bis 2007 der 43. Gouverneur von Florida.
The boom, based on unsustainable foundations and fraud, destroyed South Florida's quality of life and environment, minting millionaires through the reciprocal arrangements of campaign contributions and politicians. And Greenberg Traurig attorneys seem to pop up everywhere.

Stanford obtained authority to do offshore banking (an exclusive arrangement) with the help of Greenberg Traurig lobbyists from a Democratic administration in Tallahassee during the 1998 campaign for governor. Stanford does not begin to show up, according to a brief and cursory review of campaign contribution lists, as a prolific political donor until 2000. His contributions appear to be weighted to Democrats. Whose chains did Greenberg Traurig help to pull, during 1998, for Stanford in Tallahassee?

"Earlier, (Stanford) went to Miami attorney Bowman Brown, who said he declined to represent Stanford. A longtime banking lawyer, Brown said there were several elements that didn't seem right about Stanford's plan. "He wanted to set up an office in Miami to serve a business operation in the Caribbean," said Brown. "The idea was to attract a Latin American clientele as a platform to sell securities."

But Brown said Stanford "was not interested in undergoing any substantive banking regulations or submitting to government examiners." Brown said. By the time the state approved the trust office in December 1998, Stanford was already hawking his top product: certificates of deposit."

Could McKay Democrats, who were fish out of water when it came to understanding the Hispanic politics of South Florida, have been persuaded by Greenberg Traurig to help Stanford, based on their near perfect understanding of local politics? It is a key point avoided in the Herald story and a question the Herald should pursue.

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Florida banking agency helped Stanford set up unregulated office to sell his CDs

RAS indicted July 5, 2009

Florida regulators - over objections by the state's top banking lawyer - gave sweeping powers to banker Allen Stanford, accused of swindling investors of $7 billion.

Years before his banking empire was shut down in a massive fraud case, Allen Stanford swept into Florida with a bold plan: entice Latin Americans to pour millions into his ventures - in secrecy.

From a bayfront office in Miami in 1998, he planned to sell investments to customers and send their money to Antigua.

But to pull it off, he needed unprecedented help from an unlikely ally: The state of Florida would have to grant him the right to move vast amounts of money offshore - without reporting a penny to regulators; And he got it.

Over objections by the state's chief banking lawyer - including concerns that Stanford was laundering money - regulators granted sweeping powers never given to a private company.
Indicted financier R. Allen Stanford, accused of leading a $7 billion investment fraud scheme.
The new company was also allowed to sell hundreds of millions in bank notes without allowing regulators to check for fraud.

Over the next decade, the Miami office was among Stanford's busiest in the sale of controversial investments now at the heart of the federal government's sweeping fraud case against Stanford and his lieutenants.

"There was no lawful way that office should have been opened," said Richard Donelan, the state's chief banking counsel who opposed the deal.

Donelan said he argued that the Stanford plan violated state law, and that there were concerns about money laundering in the Caribbean and "whether Stanford's bank was in conformance with the law."

Represented by a powerful Florida law firm, Stanford got approval to create the first company of its kind: a foreign trust office that could bypass regulators, according to records obtained by The Miami Herald.

The Florida banking director who signed the agreement, Art Simon, now admits he made a mistake.

"Upon reflection, would I have liked to have done it differently? Would I have liked to stop them from doing what they currently did? Yes, of course."

The state's decision allowed Stanford to expand his banking network by offering his prize investments - certificates of deposit - without reporting the purchases, according to state and court records.

In the first six years, the office - known as Stanford Fiduciary Investor Services - took in $600 million from customers, state records show. At least 2,100 customer accounts were set up at the Miami office in the first six years, state records show.
Art Simon, the Florida banking director who signed the agreement.
Unlike other Stanford companies around the country, the Miami office was exempt from reporting the amounts of money sent overseas - bypassing anti-laundering laws. In fact, employees shredded records of the trust agreements and CD purchases once the original documents were sent to Antigua, state records show.


Officials for the Florida Office of Financial Regulation are now reviewing the decision made a decade ago, but they refuse to comment.

"All I can tell you is that there was no one that specifically regulated the office," said Linda Charity, director of the state's Division of Financial Institutions.

Simon, the Florida banking director who approved the agreement, says he should have banned the office from handling money.

"It raised serious questions in my mind after the fact as to whether we should have had tighter provisions," said Simon, a former state representative who helped draft much of Florida's modern banking legislation.

The office was only supposed to provide information for people interested in the offshore trust's services - not offer CDs and accept money, he said.

But in clear language, the agreement reached between Stanford and state regulators allows money to flow to and from the center.

Several lawyers who reviewed the documents for The Herald said much of the responsibility rests with Simon. "In this case, he was responsible for having an effective system of enforcement," said Jeffrey Sonn, a Fort Lauderdale securities attorney. "The state didn't do the kind of reviews it needed to do."

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