SEC Report: Employees Browsed Porn, Ran Private Businesses

	May 1, 2010 The Securities and Exchange Commission is taking a drubbing these days for its abject failure - despite detailed tips - to catch Bernie Madoff in what appears to be the biggest Ponzi scheme in our nation's history. Now, thanks to little - noticed report from the agency's inspector general, we have a detailed glimpse into other bad behavior by some SEC employees.
US Securities and Exchange Commission.
The report, released the day after Thanksgiving, reveals that some employees at the agency were clearly preoccupied with matters other than their mission of "protecting investors and maintaining fair, orderly, and efficient markets." The semi-annual report to Congress, which covers the period from this past April to September, details among other things a handful of employees circumventing internal controls to download porn. Let's pause for some detail: [Investigators] uncovered evidence that an employee who was still in his probationary period had used his SEC laptop computer to attempt to access Internet websites classified as containing pornography, resulting in hundreds of access denials. The OIG investigation also disclosed that this employee successfully bypassed the Commission's Internet filter by using a flash drive. Presumably, that's not the kind of initiative the SEC is looking for. There were also more serious misdeeds raised by the report. For example, there is the case of the senior-level commission employee who clearly and purposefully identified herself as a Commission employee when dealing with brokers about a family member's account, making the broker in question feel like she was trying to intimidate and bully him. The OIG referred the matter to management for "disciplinary action, up to and including dismissal." By the end of the period covered in the report, management "had not proposed or taken action." There are other examples where the punishment was less than fulsome. Investigators found employees in separate offices operated private photography businesses out of the commission: An employee repeatedly and flagrantly used Commission resources, including Commission Internet access, e-mail, telephone and printer, in support of his private photography business for several years.

Source.

Some SEC employees were watching porn and running their own private businesses when they should have been noticing the multiple signs, like ponzi scheme of Madoff and Sanford.

Time to Demand More From the SEC

Written by Diane Dimond
Saturday, 01 May 2010 07:34

I wish there were a way to indict an entire government commission. OK, well, maybe just the senior staff?

I'm speaking, of course, about the Securities and Exchange Commission, where as many as 33 of its top management - including senior lawyers and accountants - were apparently too busy looking at XXX-rated Internet porn sites to notice brewing financial tsunamis like the implosion of the U.S. housing market, the demise of giant Lehman Brothers and rouge billionaire investment gurus like Bernie Madoff and Robert Allen Stanford, who decimated countless thousands of Americans' retirement plans.

It was the SEC's job to look out for our financial well-being, and we now see how miserably it failed. As Wall Street quaked, the financial structure of America began to crumble and Ponzi schemes percolated, these Bozos were more worried about feeding their own sexual appetites.

Just a short time after the Office of Inspector General's recent Porn-Gate report made news, it was revealed that the SEC had filed a blockbuster mortgage fraud suit against investment giant Goldman Sachs. Headlines screamed the news, Congress immediately jumped on the "we've-got-to-have-hearings-on-this!" bandwagon, and attention was averted away from the SEC employees' own criminality.

I want to shine the spotlight back where it belongs. And I don't use the word "criminality" lightly.

Some of these top echelon employees were raking in as much as $222,000 a year - all taxpayer money, of course. These ne'er do wells, one who was reported to have spent at least eight hours a day for weeks on end perusing and downloading porn sites, might as well have walked into a convenience store and stolen all the cash out of the register.

This report on porn viewing at the SEC is chilling in its detail. It concludes that most of the X-rated behavior began in 2008, just as the U.S. economy began to wobble and the problem hasn't stopped! The most recent case of an SEC executive spending more time surfing nasty sites than working on our behalf occurred just a few weeks ago.

One senior SEC attorney spent so much time drooling over and capturing pornographic images on his office computer that he ran out of space on his hard drive. He began to download the lewd material onto discs, which filled multiple boxes and were stored right there in his government office. This is an attorney who surely knew what he was doing was wrong.

A female SEC accountant tried to access vulgar porn sites 1,800 times in just one two-week period. Investigators found 600 pornographic images burned onto her government-issued laptop computer's hard drive.

Another SEC accountant brought his own sexually explicit videos in to work and used the commission's computer to upload them to porn club sites he'd joined online. And a regional staffer's computer showed that he'd tried to access pornographic Websites but was stopped by the commission's Internet filter 16,000 times in one month! That averages out to 800 times every workday! What the heck was this guy doing in between trying to view porn?

Mike Leahy, author of the bestselling book "Porn Nation," asked about that type behavior, said simply, "Trust me, these guys are addicts."

Two years after the porn-fest at the SEC began, it is little comfort that they've now apparently been shamed into using their computers only for official business. It's somehow just not enough when the SEC's spokesman, John Nester, announces that "each of the offending employees has been disciplined or is in the process of being disciplined. Some have already been suspended or dismissed."

Really? Just "some" of them? And, what about the possibility of criminal charges being filed against the worst offenders - maybe charges of accepting government funds under false pretenses - because I sure feel like I've been ripped off ... in more ways than one!

It's not just the pornography scandal that should force a major revamp of the SEC. It's the culture of uncaring evident for many years there that must change. Way back in 2000, the SEC was warned about the unscrupulous activities of billionaire con man Bernie Madoff. He should have been thoroughly investigated and stopped then, yet it took nine years to bring him to justice. The SEC first heard that Robert Allen Stanford was up to no good in 1997, yet his scheme continued for more than a decade, growing to an astounding 8 billion dollars.

I don't hear Congress clamoring to hold hearings on the Securities and Exchange Commission, but I think they should. Those SEC scoundrels who spent time sexually arousing themselves instead of doing the job we taxpayers paid for should have to pay a price.

Source.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

Antiguan Charged in Stanford Case Ordered to U.S.

April 27, 2010
By Miami Herald

Antigua's former top banking regulator, Leroy King, was ordered extradited to the U.S. to face charges he helped financier R. Allen Stanford conceal a $7 billion fraud scheme, Antigua's top prosecutor said.

Director of Public Prosecutions Anthony Armstrong said that Chief Magistrate Ivan Walters ordered King removed to the U.S. in a decision issued today. Armstrong, who argued for the removal, said King has 15 days to appeal the decision to the nation's High Court.

King was formerly chief executive officer of Antigua and Barbuda's Financial Services Regulatory Commission. He has been under house arrest in Antigua since June, when he was indicted by a federal grand jury in Houston for allegedly accepting bribes from Stanford to mislead U.S. securities regulators.

His lawyer, Dane Hamilton Sr. of St. John's, Antigua, did not immediately return a call seeking comment on the court's ruling. Andy Laine, a spokesman for the U.S. State Department, said he could not immediately comment.

U.S. prosecutors allege Stanford and his co-conspirators took money from new investors to repay earlier investors who bought allegedly bogus certificates of deposit from the Antigua- based Stanford International Bank Ltd.

Blood Oath

King and Stanford took a blood oath in 2003 to support the alleged fraud scheme, which netted King hundreds of thousands of dollars in bribes, according to a document signed by former Stanford chief financial officer James M. Davis when he pleaded guilty to criminal charges in the probe last year.

Stanford, who is being held without bail pending a January 2011 trial, has denied all allegations of wrongdoing. He also faces parallel charges in a civil enforcement action filed by the U.S. Securities and Exchange Commission.

The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank Ltd., 09cv298, U.S. District Court, Northern District of Texas (Dallas).

Source.

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SEC Enforcement Lawyer Who Quashed Stanford Probes Later Did Legal Work For Stanford

	April 19, 2010 The new inspector general report on the SEC's handling of the Allen Stanford alleged Ponzi scheme case paints a devastating picture of the agency's repeated failures to pursue the billionaire banker, despite a widespread belief within the SEC's Fort Worth office that he was a fraud.
Spencer Barasch, leader of Andrews Kurth's corporate governance & securities enforcement team.
At the center of the story is Spencer Barasch, the chief of enforcement at the SEC's Fort Worth office, who declined to pursue Stanford multiple times, only to later jump ship to become a partner at a big private law firm where he proceeded to represent none other than "Sir" Allen Stanford. In fact, the IG found, Barasch was involved in deciding at least four times to close investigations of Stanford Financial or to not pursue findings by SEC investigators that the firm was a fraud.
	This former head of Enforcement in Fort Worth was responsible for: (1) in 1998, deciding to close a MUI opened regarding Stanford after the 1997 broker-dealer examination; (2) in 2002, deciding to forward the [redacted] complaint letter to the TSSB and deciding not respond to the [redacted] complaint or investigate the issues it raised; (3) in 2002, deciding not to act on the Examination staff's referral of Stanford for investigation after its investment adviser examination; (4) in 2003, participation in a decision not to investigate Stanford after receiving [Confidential Source]'s complaint letter comparing Stanford's operations to the [redacted] fraud;
Indicted financier R. Allen Stanford, accused of leading a $7 billion investment fraud scheme.
(5) in 2003, participating in a decision not to investigate Stanford after receiving the complaint letter from an anonymous insider alleging that Stanford was engaged in a "massive Ponzi scheme"; and (6) in 2005, informing senior Examination staff after a presentation was made on Stanford at a quarterly summit meeting that Stanford was not a matter they planned to investigate. The OIG investigation found that the former head of Enforcement in Fort Worth's representation of Stanford appeared to violate state bar rules that prohibit a former government employee from working on matters in which that individual participated as a government employee. Accordingly, we are referring this Report of Investigation to the Commission's Ethics Counsel for referral to the Office of Bar Counsel for the District of Columbia and the Chief Disciplinary Counsel for the State Bar of Texas, the states in which he is admitted to practice law. The inspector general David Kotz has referred Barasch to the bars of Washington and Texas, where he is licensed, for potential violation of conflict of interest rules. In March 2005, Barasch announced he was leaving the SEC after 17 years, with seven of those as the head of the Fort Worth enforcement division, for the international law firm Andrews Kurth. He joined the firm's securities enforcement team. A couple months later, Stanford Financial Group executives were looking for representation to help them handle a burgeoning SEC inquiry in to the company. They got wind of Barasch's new gig and word made its way up to Stanford himself, who said in an email to an underling, "This guy looks good and probably knows everyone at the Fort Worth office. Good job." A few days later, Barasch emailed an SEC ethics counsel to get the green light to work for Stanford. "I am not aware of any conflicts and I do not remember any matters pending on Stanford while I was at the Commission," he wrote.

Source.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

SEC aware of Stanford Ponzi scheme since 1997

April 19, 2010
By Leslie Turk

The Robert Allen Stanford alleged Ponzi scheme and its impact on middle class investors still isn't getting the media attention it deserves. Last week, a blistering report on the incompetence of the Securities and Exchange Commission was buried by the Goldman Sachs fraud charges; both were released Friday.

The Inspector General for the SEC issued a detailed 159-page report, dated March 31, concluding that the agency's Fort Worth office knew the Texas businessman was operating a Ponzi scheme in 1997. The Stanford Victims Coalition, a group that represents American investors, was quick to accuse the agency of trying to "minimize the revelation of the truth" by releasing the IG's report on the same day it announced fraud charges against investment bank Goldman Sachs.

The IG's report was requested by Republican U.S. Sen. David Vitter.

Among the most damning findings was the warning issued by a retiring assistant district administrator for the Fort Worth examination program in 1997 to the branch chief: "Keep an eye on these people [Stanford] because it looks like a Ponzi scheme to me, and some day it's going to blow up."

It was not the examiners, but rather the enforcement division, that dropped the ball. Fort Worth examiners repeatedly conducted examinations of Stanford in 1997, 1998, 2002 and 2004, concluding each time that Stanford's CDs were likely a Ponzi scheme. "The only significant difference in the Examination group's findings over the years was that the potential fraud grew exponentially, from $250 million to $1.5 billion," according to the report. However, "no meaningful effort was made by Enforcement to investigate the potential fraud or to bring an action to attempt to stop it until late 2005."

The report also noted that the former head of the SEC's enforcement office in Fort Worth impeded investigations into Stanford's operations for years. Spencer Barasch repeatedly decided "to quash the matter," the report reads. Later, when the SEC began investigating, "Barasch repeatedly attempted to represent Stanford in connection with the investigation he had blocked for seven years." Barasch is now a partner at the law firm Andrews Kurth LLP. Andrews Kurth managing partner Bob Jewell said Barasch did not violate any ethics laws and will remain with the firm, Dow Jones reported. However, because Barasch's representation of Stanford appears to have violated state bar rules that prohibit a former government employee from working on matters in which he participated as a government employee, Inspector General H. David Kotz referred the findings of his investigation to the SEC's ethics counsel for referral to the bar counsel offices in the two states Barasch is admitted to practice law.

Additionally, the IG noted that SEC enforcement officials also ignored a number of warnings from insiders at Stanford's operations. The report notes that a letter was forwarded to the SEC in October 2003 by the National Association of Securities Dealers warning that Stanford's businesses "WILL DESTROY THE LIFE SAVINGS OF MANY."

After the initial red flags, it would be another eight years, 2005, before a serious effort to expose the alleged fraud was launched. And another several years before the SEC stopped it. In February 2009 the SEC shut down Stanford's operations.

It is estimated that about $1 billion was invested in the CDs in Louisiana. The flamboyant Texas billionaire remains in jail facing charges of operating a $7 billion Ponzi scheme.

In the conclusion of the report, the IG noted:

We found that senior Fort Worth officials perceived that they were being judged on the numbers of cases they brought, so-called "stats," and communicated to the Enforcement staff that novel or complex cases were disfavored. As a result, cases like Stanford, which were not considered "quick-hit" or "slam-dunk" cases, were not encouraged.

The OIG's findings during this investigation raise significant concerns about how decisions were made within the SEC's Division of Enforcement with regard to the Stanford matter. We are providing this Report of Investigation ("ROI") to the Chairman of the SEC with the recommendation that the Chairman carefully review its findings and share with Enforcement management the portions of this ROI that relate to the performance failures by those employees who still work at the SEC, so that appropriate action (which may include performance-based action, if applicable) is taken, on an employee-by-employee basis, to ensure that future decisions about when to open an investigation and when to recommend that the Commission take action are made in a more appropriate manner.

Source.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

SEC's corruption allowed Stanford's fraud

	April 16, 2010 The Securities and Exchange Commission knew that Allen Stanford was involved in a Ponzi scheme as far back as 1997, according to a report released Friday by SEC Inspector General David Kotz. The 159-page report said the scheme was able to continue for so long due to "institutional influences" within the SEC, and the agency's desire to chase after slam-dunk cases.
Indicted financier R. Allen Stanford, accused of leading a $7 billion investment fraud scheme.
"In the Madoff case, we saw the Commission's depth of incompetency, now in the Stanford case, we see that not only is the SEC incompetent, it is also appears to be corrupt". The report also mentioned an SEC regional enforcement official who three times left the commission in an effort to represent Stanford, saying he was successful in one of these attempts. Kotz also found that the former head of enforcement in Fort Worth, Spencer Barasch, "played a significant role" in quashing investigations of Stanford and sought to represent him on three occasions after he left the SEC. In 2006, he did briefly represent Stanford before being informed by the SEC ethics office that it was improper to do so. Spencer Barasch could have done something years ago about the Allen Stanford Ponzi scheme, but didn't. Four times red flags went up in the Securities and Exchange Commission's Fort Worth, Texas, office about Stanford, who has been accused of crafting a $7 billion fraud, but Barasch - the SEC's local chief of enforcement - declined to investigate or closed down probes begun by others. (Washington, D.C.) - U.S. Sen. David Vitter today reacted to the report released by the Inspector General of the Securities and Exchange Commission that revealed the agency was aware of fraud committed by Texas financier Allen Stanford and did not pursue an investigation. "The depth of the failure at the SEC in the Stanford investigation is unbelievable," said Vitter. "There were four examinations in 1997, 1998, 2002, and 2004, and in each case examiners concluded that Stanford's CDs were likely a Ponzi scheme. Yet the SEC did absolutely nothing while Stanford fleeced investors for roughly $8 billion. What is clear from the report is that the debt the SEC owes the Stanford victims is enormous." In August of 2009 Vitter hosted a U.S. Senate Banking Committee field hearing on the Stanford case in Baton Rouge. At that time, it was determined that the original IG report was insufficient, which led Vitter, along with Sen. Richard Shelby, to request a more complete report from the SEC on the investigation. Vitter will meet with David Kotz, inspector general of the SEC and author of the report, later this week.

Source.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

Ben Barnes Sued for $5 million by Stanford Receiver

March 25, 2010
By Stanford Receiver

Democratic lobbyist and former Texas Lieutenant Gov. Ben Barnes has been slapped with a $5 million lawsuit over lobbying and consulting services he provided to R. Allen Stanford, the indicted financier accused of running a multibillion-dollar Ponzi scheme.

The suit was filed on Mar. 15 by Ralph Janvey, the receiver appointed by the court to recoup the investors' losses. It alleges that Barnes raked in millions doing consulting and lobbying work for Stanford's fraudulent investment empire since 2005. Stanford is accused of bilking tens of thousands of investors out of nearly $8 billion, in one of the largest phony investment schemes of all time.

Barnes's attorney, Jay Madrid, said that the lawsuit was baseless because his client was unaware that Stanford's businesses were illegitimate at the time the services were provided. "This lawsuit is without merit and creates a dangerous precedent for service providers in all fields," said Madrid in a written statement. "This is particularly true of those who deal in good faith with entities that have all the characteristics of legitimate enterprises but who after-the-fact become subject to receiverships, bankruptcies or similar business failings."

But the lawyer for the court-appointed receiver said that that argument does not absolve Barnes of responsibility. "In a fraudulent transfer action, lack of knowledge of the fraud is not a defense," attorney Kevin Sadler told the NLPC over email. He said that Barnes must prove that he was both unaware of the fraud and that the services he provided to Stanford were equivalent in value to the fees he collected.

"Barnes will not be able to establish the affirmative defense of objective good faith and reasonably equivalent value. His services left creditors of the Stanford entities with nothing of value," wrote Sadler.

The lawsuit alleges that in many cases Barnes's company "performed services [for Stanford] that simply furthered the Ponzi scheme." This work reportedly included consulting Stanford on how to reduce his personal federal income taxes through the Virgin Islands tax incentive laws and providing investment advice. The lawsuit also says that marketing work done by Barnes for Stanford's businesses "had the unfortunate effect of attracting new victims to [Stanford's] fraudulent investment scheme."

Barnes, a heavy-hitter in Democratic political circles, is no stranger to financial scandals. While serving as Texas Lt. Gov. the early 1970s, allegations that Barnes and other state politicians accepted bribes for political favors surfaced in an incident known as the Sharpstown scandal. Barnes was never charged, but the episode helped contribute to his exit from career politics.

Now a successful lobbyist, Barnes is still very much involved in the political arena. Last September, he hosted a Democratic Congressional Campaign Committee fundraiser for House Speaker Nancy Pelosi (D-CA) at his home in Austin, TX. Barnes and his wife have given $249,800 in political contributions in 2010, with 100 percent of those contributions going toward Democratic candidates, according to Open Secrets.

Source.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

Judge mulls bankruptcy for Stanford fraud case

March 20, 2010
By The Advocate

A Dallas federal judge is considering whether to continue a receivership searching for $7.2 billion in investments alleged to have been stolen by jailed promoter Robert Allen Stanford, of Houston.

U.S. District Judge David C. Godbey said last month that he may turn the case over to a bankruptcy court.

The issue is important to hundreds of residents in the Baton Rouge, Lafayette and Covington areas because as much as $1 billion of their money vanished last year when federal authorities shut down Stanford's worldwide operations.

Across the globe, more than 25,000 investors lost money to Stanford, 60, who has remained in federal custody since June. He is scheduled for trial in January.

Investors and attorneys are divided as to whether bankruptcy would provide more money to devastated victims than the receivership.

Jean Anne Mayhall, of Folsom, is a partner in a small business. She saw the firm's pension plan lose more than $1 million in the Stanford collapse.

Mayhall said Friday that moving the Stanford receivership into bankruptcy possibly could help defrauded investors persuade the Securities Investor Protection Corp. to cover some of their losses.

Although SIPC has provided more than $500 million to victims of convicted fraud artist Bernard Madoff, of New York, the broker-dealer-funded non-profit has refused to help Stanford victims.

"The very first rule is that the (Stanford) companies must be liquidated," Mayhall said, adding that placement of the Stanford firms into bankruptcy would be the first step toward liquidation.

Once in bankruptcy, Mayhall said, SIPC possibly could be persuaded to cover losses up to $500,000 per individual account.

Blaine Smith, of Baton Rouge, agreed. Smith lost about $1.5 million in retirement savings to Stanford.

"Bankruptcy court is where they should have gone in the first place," Smith said.

But Phillip W. Preis, a Baton Rouge attorney for more than 100 Stanford victims, said Friday that transfer of the case to bankruptcy court would cost investors more of their salvaged funds. And, he added, the move probably would not persuade SIPC officials to extend coverage to the Stanford case.

"I don't see it happening," Preis said.

Preis said SIPC helped Madoff victims because their money was never invested in anything. Madoff just pocketed investors' cash and sent them phony earnings statements.

Stanford invested his clients' money, but lied about the kinds of investments that he made and the thefts that he allegedly committed, Preis said.

The kinds of frauds Stanford is accused of committing are much more common than that of Madoff, Preis said. So, opening the door to that type of coverage would bankrupt SIPC, he said.

In Dallas, Godbey has listened to additional arguments, a transcript of a recent court hearing shows.

Attorneys for the Securities and Exchange Commission and the court-appointed receiver, as well as an examiner representing the interests of all investors, asked Godbey not to throw the case into bankruptcy. All argued that such action would further drain assets recovered by the receiver for investors.

But Gregory A. Blue, a New York attorney representing hundreds of Stanford victims, argued that bankruptcy proceedings could be no more expensive than the receivership team put together by Dallas attorney Ralph S. Janvey.

Since the receivership was established 13 months ago, Janvey has recovered less than $200 million while billing the receivership estate for more than $40 million in fees and expenses, court records show.

"Bankruptcy is not the magic bullet," Kevin Sadler, an attorney for Janvey, told the judge. "Bankruptcy, I believe, would lead to serious delay, serious costs, and deplete the (receivership) estate."

Janvey then received support from one of his most vocal critics — Dallas attorney John J. Little, the court-appointed examiner representing the interests of Stanford victims.

"Let me just say, from the investors' viewpoint, if this were a popular vote, the receiver (Janvey) would lose," said Little, who repeatedly has criticized Janvey's efforts as too expensive.

But Little added: "I can't convince myself that moving to bankruptcy will somehow make life better for the investors at the end of the day."

Blue then said Little should be replaced by a creditors' committee if the case remains in receivership.

Blue told Godbey that various investor groups disagree as to whether the case should continue in receivership or be moved to bankruptcy court.

The disagreements are too serious for one person to handle, Blue added.

An example, Blue said, is the divide between the majority of investors who lost most or all of their savings, and several hundred who were lucky enough to recover all of their money before the SEC closed Stanford down.

Last year, Janvey twice attempted to claw back nearly $900 million from the innocent winners over the opposition of the SEC.

Janvey wanted to distribute the winners' money among all the Stanford investors. But Godbey and the 5th U.S. Circuit Court of Appeals ruled against him.

"There are winners and losers in the clawback," Blue told Godbey. "The people who are the losers on that undoubtedly would want to see the money clawed back. The people who are winners don't."

Bankruptcy rules are different from those for federal district courts, so Preis was asked Friday whether a transfer to bankruptcy court could re-open the clawback issue.

"A ruling of the 5th Circuit is binding," Preis said. "That would be binding against the bankruptcy trustee just like it was against Janvey in his receivership."

Godbey took the matter under study last month. A check of court records Saturday showed that the judge had not yet ruled on the issue.

Source.

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Allen Stanford's Investors Want Alleged Swindler's Political Donations Returned

February 26, 2010
By MATTHEW MOSK

Democratic and Republican lawyers are scrambling this week to figure out how to contend with an unusual lawsuit filed by the Texas official tasked with recovering money spent by Allen Stanford, the alleged mastermind of an $8 billion Ponzi scheme.

More than $1.6 million from Stanford and his businesses went to fund Democratic and Republican Congressional campaigns between 2000 and 2008, and now the investors want the political parties to give that cash back, according to a lawsuit filed in U.S. District Court.

The suit could be an important one to watch, because of a recent spate of alleged swindlers who also happen to be prolific political donors. Most notable was Florida lawyer Scott Rothstein, convicted last month in a $1.2 billion Ponzi scheme. He and his law firm had parceled out more than $600,000 to politicians in the past five years.

The case against the party committees is also notable because it is built, in part, on an unusual rationale -- the contention that Stanford didn't actually get anything in return for his contributions. Under a quirk of the law, if the lawyers for the political parties can't show that he did receive some tangible benefit, they may have to come up with the money. And it's a point they'll have a hard time contesting, since they can't exactly argue that he bought influence with his money.

Ralph S Janvey, the lawyer who filed the case in Dallas Tuesday, said he began requesting the money in writing a year ago and continued making written requests until earlier this month. The party committees "have ignored these requests, and, as a result, the Receiver has been forced to file this lawsuit seeking the return of the funds," Janvey wrote.

Overall, the Democratic Senatorial Campaign Committee received the largest share of the Stanford money -- $950,500 – according to the Texas lawsuit. The National Republican Congressional Committee received $238,500, the Democratic Congressional Campaign Committee got $200,000, the Republican National Committee took in $128,500, and the National Republican Senatorial Committee received $83,345.

Lawyers and press aides for several of the political committees initially told ABC News they thought the case would be dismissed right away, and they saw little chance they would have to give the money back.

"The money's been spent. It's not going to be returned," one party official said, speaking on the condition he not be named because the litigation is pending.

But after spending more time reviewing the situation, several campaign finance lawyers told ABC News that this could actually be a far more tricky case than it initially seemed.

Under election laws, there are only a small handful of legal reasons a political committee would be forced to return contributions. They would have to refund money if it came from a corporation, came from a foreign source, or was funneled through an illegal straw donor arrangement, said Lawrence M. Noble, a former chief counsel to the Federal Election Commission.

"On the other hand, if the receiver has an independent legal basis for getting the money back, I don't think the party committees would be treated any differently than any other recipient of Stanford funds, whether it is a charity or a business," Noble said.

And that, potentially, is where the trouble starts for the Democratic and Republican committees, said Jan Baran, a Washington election lawyer.

There's a separate set of laws covering something called a "fraudulent conveyance," Baran said. Victims of swindling are entitled to recover any goods that were obtained with their swindled money. If the money was donated or given away rather than used to obtain something tangible, the victim can ask for the money back rather than tangible items. Any charity or other third party that has received money from a swindler may then be compelled to return that money to the person from whom it was originally obtained.

Hence one of the key arguments in Janvey's court filing -- that the political parties to which Stanford donated did not provide anything tangible in exchange for the allegedly swindled funds. They are more like charities that have been given swindled money and must return it.

Just because Janvey's legal argument "is unprecedented, that doesn't mean it will be unsuccessful," Trevor Potter, the campaign lawyer who represented Sen. John McCain during his presidential bid, said in an interview.

Lawyers for the five party committees involved in the case either declined to comment or did not respond to emails and phone calls. They can't argue that Stanford's donations bought him influence, but they are known to be checking if the money got him any tangible perks, like access to a concert or a sporting event or an exclusive gala at one of the party conventions.

Baran, who used to represent Republican congressional committees, said he suspects the party lawyers will try to reach a settlement with Janvey, rather than risk seeing this case resolved by a judge.

"I think Stanford's [alleged] victims are going to get some of the money, if not all of it," Baran said.

Source.

Political contributions from Mr. Stanford and his affiliated companies.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

Stanford Receiver Sues Political Committees

February 23, 2010

The political stakes in the Stanford Financial scandal are getting higher.

The court-appointed receiver who is tracking down the billions of dollars missing in the alleged Ponzi scheme - Dallas attorney Ralph Janvey - has filed suit against the major parties' congressional campaign committee seeking the return of $1.6 million in contributions they received from company founder Allen Stanford and his top lieutenants.

The move comes less than two weeks after Janvey demanded the committees return the funds, but received no response.

The suit, filed in federal court in Dallas, names the Democratic Senatorial Campaign Committee, the National Republican Congressional Committee, the Democratic Congressional Campaign Committee, the Republican National Committee and the National Republican Senatorial Committee.

The suit says the committees "have no legitimate right" to keep the contributions, which Janvey says belong to Stanford's investors.

The suit says the Democratic Senatorial Campaign Committee received the largest amount of tainted contributions, $950,000. The National Republican Congressional Committee follows with $238,500; the Democratic Congressional Campaign Committee received $200,000, the Republican National Committee got $128,500 and the National Republican Senatorial Committee took in $83,345. None of the committees was immediately available for comment.

Janvey has thus far stopped short of suing individual members of Congress, from whom he is seeking another $200,000 in contributions. Several of the congressmen, including Texas Republican Pete Sessions and New York Democrat Charlie Rangel have said they donated their Stanford-linked contributions to charity.

In addition to Janvey's lawsuit, the Miami Herald reported in December that federal prosecutors are investigating whether Stanford's lavish campaign contributions were an improper attempt to buy influence.

Stanford Receiver Sues Democratic, Republican Groups

Democratic and Republican political groups were sued for the return of more than $1.6 million in money investors entrusted to Stanford Financial Group before the company's principals were charged with a $7 billion fraud.

Court-appointed receiver Ralph Janvey claims the Republican National Committee, the Democratic and Republican senatorial committees and each party's congressional campaign groups have refused to return the money, according to a complaint he filed Feb. 19 in federal court in Dallas.

U.S. prosecutors in June announced separate charges against company founder R. Allen Stanford and chief financial officer James Davis for their roles in what the government said was a $7 billion securities-fraud scheme.

"The committee defendants did not furnish any consideration whatsoever for the funds they received from Stanford, Davis and the Stanford Financial Group," according to Janvey's complaint. "Consequently, they have no legitimate right to retain the funds."

Stanford and others were also sued last year by the U.S. Securities and Exchange Commission, triggering Janvey's appointment to oversee Stanford's businesses and recoup money for investors. Stanford has denied wrongdoing.

Davis pleaded guilty in August to three felony counts. His lawyer, David Finn, said then that his client would cooperate with federal investigators.

The Democratic Senatorial Campaign Committee received $950,500, according to Janvey. The organization didn't immediately reply to an e-mailed request for comment on the lawsuit.

Sara Sendek, a spokeswoman for the Republican National Committee, didn't immediately return a call seeking comment.

The political contributions case is Janvey v. Democratic Senatorial Campaign Committee, 10cv346, in the Northern District of Texas (Dallas).

Source.

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Suit filed to force lawmakers to return Stanford contributions

February 22, 2010
By CHRIS HAWES

Thousands of families lost their life savings when, investigators say, they uncovered a massive fraud centered around billionaire Allen Stanford.

Now, the man assigned to defend the victims says money they are due is being withheld by an unlikely source: Politicians.

They're refusing to give back more than $1.8 million they received from Stanford, now accused of being a criminal.

Arley and Marsha Carter worked hard to build the family business that eventually let them retire in the country.

Then came news of the massive ponzi scheme involving their money.

They weren't alone; thousands of other investors were also exposed.

"A lot of sleepless nights," Marsha Carter told News 8 during an interview last March. "It's hard not to worry.

The Carters were hopeful that federal investigators would find some money still left in Stanford accounts. But on Monday, they learned that it is government leaders who are still holding on to some of those funds - and they're angry.

In a lawsuit filed in federal court, attorney Kevin Sadler, representing the court-appointed receiver, contends that political committees from both political parties are holding on to $1.6 million contributed by Allen Stanford and his affiliated businesses - money they retained even as Stanford investors suffered.

"One lady and her husband had invested, and she was having problems just getting his funeral taken are of," Marsha Carter said in the 2009 interview.

The receivers also published the names of individual campaigns that have not returned the money. Thus far, they have not been sued.

In Texas, the list includes KPAC, the political action committee affiliated with Sen. Kay Bailey Hutchison; Sen. John Cornyn; and U.S. Representatives Pete Sessions, Charles Gonzalez, and Pete Olson.

Representatives Kevin Brady, Lamar Smith, Sam Johnson, Joe Barton and Michael McCaul are also on the list.

KPAC - along with the Cornyn, Sessions, Brady, and Johnson campaigns - told News 8 the money went to charity.

But Sadler equated that to saying, "I don't have the money anymore because I gave it to someone else."

He also points out that the gifts to charities do nothing for the victims, many of whom are seeing their golden years become their most trying years yet.

Late Monday, Rep. Olsen said he will return the Stanford funds to the receivership.

Source.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

TD Bank Loses Bid to End Stanford Investments Lawsuit

January 22, 2010
By Joe Schneider

Toronto-Dominion Bank Canada's second-biggest bank by assets, must face a lawsuit accusing it of negligence for accepting deposits for the Antigua-based bank run by alleged Ponzi scheme operator R. Allen Stanford.

Investors in Alberta and Quebec claim in the suit that they lost C$17 million ($16.1 million) when Stanford International Bank Ltd. collapsed last year amid fraud allegations. The case can move ahead on narrower grounds than initially proposed, Ontario Superior Court Judge Herman Wilton-Siegel in Toronto said in a ruling released yesterday.

"The court has allowed the negligence claim to proceed based on actual knowledge, willful blindness and recklessness," Jim Patterson of Bennett Jones LLP, who represents the plaintiffs, said today in a phone interview. "We will proceed."

Stanford faces 21 criminal charges that he swindled investors of more than $7 billion in a scheme that paid above- market rates to early investors by taking money from those who bought certificates of deposit sold by his bank. The investors included the plaintiffs in the Ontario case, who bought the deposits through Toronto-Dominion, the correspondent bank for Stanford International.

Susan Webb, a spokeswoman for the Toronto-based bank, declined to immediately comment.

Five Plaintiffs

The five plaintiffs in the case are closely held Dynasty Furniture Manufacturing Ltd., which is based in Calgary; Alberta investors Shafiq Hirani, Hanif Asaria and Dinmohamed Sunderji; and a Quebec company. The high-yield certificates of deposit bought by the plaintiffs appear to have been issued as part of a Ponzi scheme that collapsed in February, Wilton-Siegel wrote.

Toronto-Dominion maintained 12 accounts for Stanford International and accepted deposits into the accounts, the judge said.

Wilton-Siegel dismissed the investors' claims that the bank had a duty of care to investigate the Stanford accounts and to verify they were legitimate. The law doesn't require banks to conduct such investigations for their clients, the judge said.

"Nor is there any case law imposing liability on a bank for failing to conduct such an investigation," Wilton-Siegel wrote.

The judge also dismissed claims the bank ought to have known the Stanford scheme was illegal.

Wilton-Siegel allowed the investors to change the wording in their filing to proceed with a claim that the bank failed to comply with the Proceeds of Crime Act, a federal anti-money laundering law.

The case is Between Dynasty Furniture Manufacturing Ltd. and Toronto-Dominion Bank, 09-8373-00CL, Ontario Superior Court of Justice (Toronto).

Source.

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Stanford's Lawyer Played Key Role In Shielding Banker From Scrutiny

January 5, 2010
By Zachary Roth

We told you arlier today about Yolanda Suarez, the Florida lawyer who forged ties with members of Congress and ran interference with journalists on behalf of Allen Stanford. But it's also worth paying attention to another Florida lawyer and key Stanford ally, who appears to have played an equally crucial role in allowing the Texas banker -- who was charged in June with orchestrating a multi-billion dollar Ponzi scheme -- to stay a step ahead of the government for so long.

As Stanford's lawyer of choice, Carlos Loumiet helped set up the unusual regulatory arrangement that allowed the Stanford Financial Group (SFG) to move hundreds of millions of dollars from Florida to Antigua with little scrutiny. Soon afterwards, he served on a Stanford-funded task-force to rewrite Antigua's banking laws -- an effort that U.S. regulators have said left major loopholes and hindered efforts to crack down on fraud. And the court-appointed receiver seeking to unravel Stanford's far-flung financial empire has demanded that the two law firms that have employed Loumiet -- who hasn't been charged with any wrongdoing -- hand over records of their work on behalf of Stanford.

As the Miami Herald reported earlier this year, the story starts in 1998, when Stanford wanted to set up an easy way to move money from SFG's Miami office, which sold certificates of deposit to investors, to Antigua, where his banking empire was headquartered.

He turned to Loumiet, at the time a lawyer at Greenberg Traurig. That's the Miami firm where Suarez, then SFG's legal counsel, had previously worked, and which would later become known as the firm from which Jack Abramoff bribed government officials. As the Herald has also reported, despite the objections of the state's top banking lawyer, Loumiet prevailed on Florida officials to allow SFG to set up a special trust office that could move money to Antigua without submitting to fraud or money -laundering checks. With the money pipeline established, the Herald reported, the Miami office sold millions in CDs over the next decade, then used jets to fly the checks, stuffed in pouches, to Antigua.

That wasn't the end of Loumiet's service to Stanford though. About a year later, the Clinton administration, as part of an effort to crack down on money laundering, was considering cutting off access to U.S. currency for all offshore institutions in Antigua.

In order to convince U.S. regulators to back off, Stanford volunteered to organize and fund a task force to re-write Antigua's banking laws -- allowing him to appoint the task force's members. Stanford named Loumiet and another Greenberg lawyer, Patrick O'Brien.

Loumiet touts the experience in the bio on his law firm website. But the revised laws that he and his fellow panelists drew up were denounced by the U.S. government as containing loopholes that made it even harder than previously for regulators to access bank records. In a letter to the Antiguan Prime Minister, the Treasury Department complained that the island nation had "weakened its anti-money laundering laws to the point they are now significantly below international standards, making Antigua more vulnerable to money laundering."

In an interview with the Washington Post at the time, Loumiet defended Stanford and suggested the U.S. and Britain did not have Antigua's best interests at heart. "Allen Stanford did not feel that if this was done with the benevolent help of the U.S. and Britain it would help Antigua," he said. "They were trying to put the fox in charge of the chicken coop, and frankly the chickens weren't very happy about it."

In any case, the panel had done its job. Stanford's operation continued largely free from regulatory scrutiny.

But Stanford still appears to have taken pains to keep Loumiet involved. When, in 2001, the lawyer moved from Greenberg to Hunton & Williams, where he remains, Stanford switched to the new firm and continued to use Loumiet as a lawyer.

That wasn't all Stanford used Loumiet's new firm for. Since 2000, Stanford Financial Group, like many large companies, had hired lobbyists to promote its interests in Washington. But, according to lobbying disclosure reports, Hunton was hired in 2005 to lobby Congress on tax issues, on behalf of Stanford personally. A spokeswoman for the firm declined to discuss what the work consisted of.

The court-appointed receiver on the Stanford case, Ralph Janvey, appears to see Loumiet's work as central to the operation. Janvey has asked both Greenberg and Hunton for files containing records of their work for Stanford. Hunton has handed over some files, but is fighting to keep others secret, citing legal issues regarding jurisdiction and client privilege.

A request to Loumiet from TPMmuckraker to discuss his work on behalf of Stanford was referred to a Hunton spokeswoman, who declined to comment.

Source.

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

Feds probe links between lawmakers, Allen Stanford

January 3, 2010
By MICHAEL SALLAH and ROB BARRY

Just hours after federal agents charged banker Allen Stanford with fleecing investors of $7 billion, the disgraced financier received a message from one of Congress' most powerful members, Pete Sessions.

"I love you and believe in you," said the e-mail sent on Feb. 17. "If you want my ear/voice - e-mail," it said, signed "Pete."

The message from the chair of the National Republican Congressional Committee represents one of the many ties between members of Congress and the indicted banker that have caught the attention of federal agents.

The Justice Department is investigating millions of dollars Allen Stanford and his staff contributed to lawmakers over the past decade to determine if the banker received special favors from politicians while building his spectacular offshore bank in Antigua, McClatchy Newspapers has learned.

Agents are examining campaign dollars, as well as lavish Caribbean trips funded by Stanford for politicians and their spouses, feting them with lobster dinners and caviar.

The money Stanford gave Sessions and other lawmakers was stolen from his clients while he carried out what prosecutors now say was one of the nation's largest Ponzi schemes.

Sessions, 54, a longtime House member from Dallas who met with Stanford during two trips to the Caribbean, did not respond to interview requests.

Supporters say the lawmaker, who received $44,375 from Stanford and his staff, was not assigned to any of the committees with oversight over Stanford's bank and brokerages.

His press secretary, Emily Davis, said she was unable to comment on the e-mail sent at 11:31 a.m. on the day Stanford was charged by the U.S. Securities and Exchange Commission. "I haven't seen it, so I can't verify its authenticity at this time," she said.

Found on the servers

But the message found on Stanford's computer servers and the contributions he made to Sessions and other lawmakers - totaling $2.3 million - are now part of the government's inquiry.

Records show Stanford also doled out $5 million on lobbying since 2001, setting up his own Washington firm last year with expensive furnishings and artwork - the money plundered from his customers' accounts.

Over the years, he took on battles to protect his banking network while fending off regulators.

In 2001, he pressed successfully to kill a bill that would have exposed the flow of millions into his secretive offshore bank in Antigua.

The next year, he helped block legislation that would have drawn more government scrutiny to his bank.

While he was fighting reforms to financial secrecy and offshore banking laws, Stanford was hobnobbing with dozens of lawmakers.

Stanford hosted a wedding dinner for New York's U.S. Rep. John Sweeney at his five-star restaurant in Antigua in 2004 - toasting the couple for photographers-and staged a cocktail fundraiser for now-disgraced Ohio congressman Bob Ney at his bayfront Miami office.

"He legitimized himself by having himself vetted by powerful members of Congress," said Steven Riger, a former vice president at Stanford's Miami brokerage. "It was all about the public's perception."

Kent Schaffer, Stanford's court-appointed attorney, said his client never asked for special favors. "Stanford gave contributions to politicians, but there was nothing criminal behind it," he said.

The federal investigation comes after months of criticism from victims' groups complaining that elected leaders failed to vet Stanford before accepting money from him the past 10 years. If they had, they would have discovered that the U.S. State Department in 1999 concluded that Stanford helped create a haven for money-laundering in Antigua.

Most members of Congress contacted by McClatchy Newspapers declined to discuss their ties to the banker, other than to say they have since returned the contributions.

Stanford's foray into the Washington power game began in 2001, shortly after he was allowed to open a controversial trust office in Miami.

The special office was a boon to Stanford's bank, generating millions in the sale of certificates of deposit - the money stuffed in pouches and sent on jets to his banking headquarters in Antigua.

But when a bill was created to compel offshore bankers to reveal the sources of money flowing into their banks, Stanford jumped into the fight to kill it.

The measure would have forced Stanford - who was moving millions illegally through his Miami trust office - to open his books to federal regulators.

"He wanted the complete freedom to move money offshore without any threat," said Jack Blum, a lawyer who testified before Congress supporting the legislation. "He was cheerleading for the offshore tax havens."

To combat the bill, Stanford launched a strategy he would use for the next eight years: He gave money to the party in power, including $40,000 to the Senate Republican Campaign Committee and $100,000 to the inaugural committee of George W. Bush, records show. By summer of 2001, the bill was dead.

In the ensuing years, Stanford's banking empire flourished, with the Miami office generating hundreds of millions of dollars, records show.

In late 2001, Stanford confronted another threat: A bill allowing state and federal regulators to share details about fraud cases - which would have brought Stanford's brokerages under closer scrutiny - landed in the Senate Banking Committee.

Though the Senate was now controlled by Democrats, Stanford was prepared: He had given $500,000 to the Democratic Senatorial Campaign Committee in 2002 - his largest-ever contribution.

"I told him that the Democrats were going to take over, and he needed to make friends with them," recalled his lobbyist Ben Barnes, once Texas' lieutenant governor.

Stanford also doled out $100,000 to a national lobbying group to fight the measure.

The bill, which sparked sweeping opposition from brokerages and insurers, never made it to a vote.

While he was scoring points in Washington, Stanford was squaring off for a crisis at his banking headquarters in Antigua.

In 2003, investors began questioning the legitimacy of his certificates of deposit, which generated higher returns than major U.S. banks, and articles began appearing in news magazines about money-laundering in Antigua.

In addition, Stanford was drawing the scrutiny of the SEC, which was demanding to know where his bank was investing customers' money.

A contact in Antigua

In the ensuing years, Stanford would play a dual role of staving off regulators - paying $200,000 in bribes to Antiguan banking chief Leroy King - while forging ties with members of Congress, court records show.

Those connections deepened when Stanford started hosting a series of congressional visits to Antigua.

It began in 2003, when lawmakers including Sessions, Ney, John Sweeney, Gregory Meeks, Donald Payne, Max Sandlin and Phil Crane arrived in Antigua on a mission to "promote relations" with the Caribbean nation.

The cost of the January trip - including nights in luxury hotels and two Stanford jets for travel - came to $39,500, records show.

For four days, they gathered for talks on business in the Caribbean, trading jokes with Prime Minister Lester Bird and touring the island.

In time, the group of lawmakers, which became known as the "Caribbean Caucus," would take 11 more trips - the costs picked up by the Inter-American Economic Council, a nonprofit funded by Stanford.

A total of $311,307 was spent on the trips to places like Montego Bay, St. Croix and Key Biscayne. "We were rolling out food, caviar, wine, lobster," recalled Stanford's personal chef, Jonas Hagg.

During a 2004 Antiguan trip, Sweeney and his 34-year-old girlfriend were married, with Stanford hosting the ceremony and reception for the New York Republican at the famed Pavilion Restaurant.

"If it wasn't for Allen, I certainly would not be here today," Sweeney told Stanford's newspaper, The Antigua Sun. "He has done a tremendous job of promoting and raising the awareness of Antigua in the United States, and people take notice of a man of his standing and stature in the halls of Washington."

Photos of Stanford and caucus members were splashed in company publications and news releases. "You looked and you saw all these important people," Riger said. "That legitimacy allowed him to go out and collect a lot of money."

Stanford was not only funding the trips - the money looted from his customers - but also staging fundraisers.

He held an event at his office on the 21st floor of the Miami Center for Ohio house member Ney, who was later sentenced to 30 months in prison after admitting to accepting gifts and money from clients of lobbyist Jack Abramoff.

He rallied his brokers when Sessions was in a tight race with Democrat Martin Frost in Texas in 2004.

Working the phones

"He got on the speakerphone and told everyone to give to Pete Sessions," said Riger. "He said Sessions was good for our company and we needed to give to him."

Stanford raised $38,875 in the final weeks of the campaign for Sessions, who defeated Frost.

While he was forging ties in Washington, he was getting into deeper trouble with the SEC. By 2006, the agency had sent two confidential letters to the Antiguan government demanding information about the solvency of Stanford's bank, records show.

Both times, Stanford was aided by lead regulator King, who managed to keep the bank's finances secret while accepting thousands in bribes from Stanford - their pledge sealed in a blood oath in Stanford's airplane hangar in Antigua, according to court records and interviews.

With pressure mounting from the SEC, Stanford increased his lobbying in Washington.

In 2008, he started his own lobby firm on 14th Street and New York Avenue, spending $2.2 million - more than he spent the previous four years combined, records show.

"He was spreading his money around," said Blum, the Washington expert on money-laundering.

"It was a way of gaining legitimacy and getting people to say, 'Hey, I'm OK.' "

Just one month before the FBI launched a criminal probe into his banking empire, Stanford hosted a lavish gathering of powerful Washington insiders, with keynote speeches from Madeleine Albright, former secretary of state, and Paul Wolfowitz, former deputy secretary of defense.

Also co-hosting the May event: Miami lawyer Yolanda Suarez, Stanford's longtime chief of staff. The topic: the global financial crisis, and the private sector's need to work with government. But Stanford's own crisis was about to explode.

On Feb. 17, armed with court orders, federal agents swarmed into his offices across the country, shutting down his operations and declaring that Stanford was running a massive fraud.

In his Houston headquarters, agents found reams of company documents, electronic records and e-mails received by Stanford in his final days, including the message from Sessions.

As the scandal unfolded, members of the Caribbean Caucus began returning their contributions.

Nineteen lawmakers gave back a total of $87,800 to the court-appointed receiver as of August. Others, including Meeks, Sessions, Sandlin, Sweeney and Crane, said they turned some of the money over to charities.

In addition, Democratic House member Charlie Rangel returned $11,800 to charities, and Democratic Florida Sen. Bill Nelson $45,000 to charities, half of which came from a fundraiser at Stanford's Miami office in 2006.

"Just like a number of people, (they) started to run for cover the minute Allen was under scrutiny," said Schaffer, Stanford's attorney.

"People he had been very close to - and never asked anything of - all of a sudden are distancing themselves. Whether he's innocent or guilty, they don't really care. They worry about how it affects their image."

As federal agents examine Stanford's political contributions, victims' groups have criticized lawmakers for failing to vet Stanford before accepting his donations and trips.

The State Department had singled out Stanford in a 1999 report for using his influence to weaken the Antiguan banking laws, creating "one of the most attractive financial centers in the Caribbean for money launderers."

"None of this was difficult to ascertain," said Bill Branscum, a former U.S. Treasury agent who investigated laundering in the Caribbean. "With the position of public trust comes a consummate responsibility. They should have made it their business to figure out what was going on."

"You've got to give (Stanford) credit - he got the best bang for his buck."

Source.

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