The CIA, Banking Scams, and R. Allen Stanford

	August 5, 2010 By Tom Burghardt In a scandal-plagued era such as ours, scarred by murderous wars, occupations and corruption that would make a Roman emperor blush, accused crooks have names; even juiced ones like R. Allen Stanford. Last year, when a federal court in Texas handed down indictments charging Stanford International Bank (SIB) and its officers with "orchestrating a fraudulent, multibillion dollar investment scheme," I wondered: was there more to the story? Indeed there was.
R. Allen Stanford and the CIA
Once described by fawning media as a "flamboyant Texan" and "philanthropist," Stanford was founder and sole shareholder of a global banking empire once conservatively valued at $50 billion.

According to the federal indictment, "Sir Allen," as he was dubbed by a corrupt former minister of Antigua, ran a massive Ponzi scheme camouflaged as a bank that sold some $7 billion in self-styled "certificates of deposit" and $1.2 billion in mutual funds.

Operated from behind a façade of well-appointed offices and with a jet-set lifestyle to match, the Stanford grift may have been impressive but it was a scam from the get-go. Lured by "high rates that exceed those available through true certificates of deposits offered by traditional banks," thousands lost their shirts.

Those high rates were a lie and the bank's "unique investment strategy" about as legitimate as a penny-stock fraud or advance fee scam on the internet. Of the $8 billion hoovered up by the banker and his cronies, only about $500 million have been recovered.

Facing the prospect of years in prison, The Miami Herald reported that SIB's chief financial officer James Davis, once Stanford's college roommate and originally charged in the indictment, copped a plea to save his own neck.

Davis told the Justice Department that "his boss had been stealing from investors for decades while paying bribes to regulators and even performing blood oaths never to reveal his secrets."

Talk about a wise guy!

And with connections and generous pay-outs to U.S. politicians going back more than a decade, 65% of which went to Democrats including our "change" president, Allen Stanford was plugged-in.

Evidence also suggests he may have gotten an assist covering his tracks from regulators and U.S. secret state agencies, including the CIA.

SEC Stand Down

Allen Stanford did business the American way; he swindled depositors and then siphoned-off the proceeds into a spider's web of offshore accounts.

The indictment charges "it was part of the conspiracy that Stanford... and others would cause the movement of millions of dollars of fraudulently obtained investors' funds from and among bank accounts located in the Southern District of Texas and elsewhere in the United States to various bank accounts located outside of the United States... in order to exercise exclusive control over the investors' funds."

Auditors learned that funds were moved through Stanford-controlled accounts to offshore banks, including HSBC in London, Bank Julius Baer in Zurich and eight others; banks which have figured in past money laundering or tax-avoidance scandals. None have been charged with an offense in connection with the affair.

In all, 28 numbered accounts were listed by prosecutors, veritable black holes that escaped scrutiny; that is if regulators in Washington were minding the store, which they weren't.

Years earlier, SEC investigators at the commission's Ft. Worth office uncovered evidence of wrongdoing. According to an explosive report by the SEC's Office of the Inspector General, Ft. Worth examiners launched a series of probes in 1997, 1998, 2002 and 2004 exploring SIB practices but their diligence was sabotaged by high-level officials.

That report, Investigation of the SEC's Response to Concerns Regarding Robert Allen Stanford's Alleged Ponzi Scheme, Case No. OIG-526, March 31, 2010, paints a damning picture of the regulatory process.

The inspector general states: "While the Fort Worth Examination group made multiple efforts after each examination to convince the Fort Worth Enforcement program ('Enforcement') to open and conduct an investigation of Stanford, 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."

Last month, the Fort Worth Star-Telegram reported that staff members, who spoke on condition of anonymity because they feared management retaliation, told the newspaper that higher-ups wanted "tools to do away with people who have a dissenting opinion."

Senior managers called the probes a "goat screw" and ordered them killed.

The OIG investigation "found that the former head of Enforcement in Fort Worth, who played a significant role in multiple decisions over the years to quash investigations of Stanford, sought to represent Stanford on three separate occasions after he left the Commission, and in fact represented Stanford briefly in 2006 before he was informed by the SEC Ethics Office that it was improper to do so." (emphasis added)

In Florida, The Miami Herald revealed that state regulators did the SEC one better and gave the bank carte blanche to operate secretly, moving "vast amounts of money offshore--without reporting a penny to regulators."

The arrangement between the bank and the Florida Office of Financial Regulation was so brazen, that Stanford's company "was allowed to sell hundreds of millions in bank notes without allowing regulators to check for fraud."

And once those suspect instruments were sold, the Herald reported that "employees shredded records of the trust agreements and CD purchases once the original documents were sent to Antigua, state records show."

A sweet deal if you can get it, or have powerful friends who might wish to avoid messy inquiries touching upon sensitive matters.

The New York Times reported last year that current charges "stem from an inquiry opened in October 2006," that is, nearly a decade "after a routine exam of Stanford Group, according to Stephen J. Korotash, an associate regional director of enforcement with the agency's Fort Worth office."

Korotash told the Times that the SEC "stood down" its investigation "at the request of another federal agency, which he declined to name."

According to BusinessWeek, in 2006 the Bush administration "bestowed on his intelligence czar... broad authority, in the name of national security" to excuse companies from "their normal accounting and securities-disclosure obligations" if such disclosures revealed "certain top-secret defense projects."

At the time, William McLucas, the Securities and Exchange Commission's former enforcement chief told the publication that the ability to conceal financial information from regulators under the rubric of "national security" could lead some companies "to play fast and loose with their numbers."

The former official said, "it could be that you have a bunch of books and records out there that no one knows about."

In response to media reports, congressman Dennis Kucinich (D-OH), wrote a letter to SEC Chair Mary Schapiro last year, demanding documents, and answers, why the SEC suspended investigations of the "Stanford Group under pressure from another unidentified federal agency."

The Ohio congressman said, "if this is true... our subcommittee will demand that the SEC reveal the name of that agency which told it not to enforce federal laws which protect investors."

Neither documents nor answers were forthcoming.

Cynics might see something untoward here, but I think it's all just a coincidence, like drug planes bought with bundles of cash laundered through American banks.

Drug Probes Killed

In 1986 during the Iran-Contra period, Allen Stanford's Guardian International Bank set up shop on the sleepy Caribbean isle of Montserrat (pop. 5,870).

It didn't take long before the bank came under scrutiny. Guardian was the subject of a joint Scotland Yard-FBI investigation "into so-called 'brass-plate' banks," The Independent disclosed.

According to reporters David Connett and Stephen Foley, the bank "was suspected of laundering drug money from the notorious Medellin and Cali drug cartels run by Pablo Escobar and the Orejuela brothers."

During the Iran-Contra scandal, congressional investigators and journalists scrutinized links between Colombian drug traffickers and the CIA's Nicaraguan Contra army.

By 1986, evidence began to emerge that top Contra officials and the Agency enjoyed cosy ties with both Escobar and the Orejuela brothers. Under pressure from the Reagan administration however, both Congress and corporate media deep-sixed the story as the affair was covered-up.

A decade later, largely as a result of outrage generated by the late Gary Webb's Dark Alliance series, a memorandum of understanding between Reagan's Justice Department and the Agency entered the public record. That 1982 memo legally freed the CIA from reporting drug smuggling by their assets.

Former FBI agent Ross Gaffney who led the Guardian probe, told Connett and Foley that "we suspected that Stanford's bank was involved in money laundering." But before that investigation could be developed, Stanford suddenly pulled up stakes and "voluntarily surrendered his Montserrat banking licence and left the island."

Gaffney said that even after Guardian closed, the FBI "continued to take an interest in Stanford and set up a second inquiry into that bank after receiving intelligence that it continued to launder money for the Medellin and Cali cartels."

The former federal agent told The Independent, "We had hard intelligence about what he was doing and we began to develop it" but the investigation died or more likely, killed, by officials higher-up the food chain.

After leaving Montserrat, Stanford trained his sights on Antigua and Barbuda and developed a close relationship with former prime minister Lester Bird.

"Under the Bird family leadership" Connett and Foley reported, "the island was widely regarded as one of the most corrupt in the Caribbean, with well-documented links to arms and drug smuggling and money laundering."

According to The Independent, "in 1990, Israeli automatic weapons ordered by Mr Bird's brother Vere turned up in the hands of a notorious Colombian drug trafficker."

Despite suspicions, it appears that Stanford was golden as far as the feds were concerned; just another guy with an endless supply of "get-out-of-jail-free" cards.

One reason Stanford operated with impunity, the BBC informs us, is that he "may have been a US government informer."

DEA documents seen by BBC's investigative unit Panorama, suggest that "drug money [was] originally paid in to Stanford International Bank by agents acting for a feared Mexican drug lord known as the 'Lord of the Heavens'."

Confidential DEA sources believe that Stanford turned over "details of money-laundering from Latin American clients from Colombia, Mexico, Venezuela and Ecuador," thus "effectively guaranteeing himself a decade's worth of 'protection' from the authorities, especially the SEC."

"We were convinced that Stanford's bank attracted millions of narco-dollars," sources told Panorama, "but it was very difficult to get the evidence to nail him."

"The word is" BBC reported, "that Stanford has been a confidential informer for the DEA since '99."

Snitch or not, this raises intriguing questions.

Was Stanford's bank a black hole which U.S. intelligence agencies could exploit, in the interest of "national security" mind you, and therefore exempt from "normal disclosure obligations" as BusinessWeek averred?

If this were so, then even if Stanford were an informant he could have continued to launder drug money and profit nicely; such gentleman's agreements are not without precedent.

One need only glance at internal U.S. government documents released by the National Security Archive, documents which revealed the Cali cartel's close collaboration with corrupt Colombian police, neofascist paramilitaries and the CIA when Medellin drug lord Pablo Escobar was run to ground.

Pointedly, was Stanford's banking empire another in a long line of institutional channels that drug cartels and the CIA could both profit from?

Banks, Drugs and Covert Operations

Across the decades, historians, investigative journalists and researchers have uncovered strong evidence that various banks have served as virtual cut-outs for CIA covert operations.

Readers need only recall illegal activities by institutions as diverse as Paul Helliwell's Castle Bank and Trust in the Bahamas, Frank Nugan and Michael Hand's Nugan Hand Bank in Sydney and the Cayman Islands, or the far-flung empire of Agha Hasan Abedi's Bank and Credit and Commerce International.

Separated in time and geography, what all three banks had in common was their close proximity to international drug trafficking networks and the CIA, particularly in areas of acute interest to U.S. policy planners. Did Stanford International Bank have a similar arrangement with the Agency?

When the scandal finally broke, the Houston Chronicle reported that authorities had been "looking for ties to organized drug cartels and money laundering, going back at least a decade."

In the late 1990s, court documents revealed that "operatives of the Juarez cartel began opening accounts at Stanford's Antigua-based bank," laundering profits amassed by the Amado Carrillo Fuentes organization, the late "Lord of the Heavens" referred to in the BBC report.

The Chronicle notes that Fuentes' representatives "used Stanford International Bank to open 10 accounts and deposit $3 million." We should bear in mind however, these represent only known accounts. Were there others? Federal and state investigators have said that there were.

After authorities determined the accounts were held by a notorious drug cartel, Stanford turned over the $3 million. Yet despite hard evidence of criminal wrongdoing, federal officials told the Chronicle that "any alleged Stanford connection to drug cartels and their money could lie buried in the paperwork gathered for the Security and Exchange Commission's civil inquiry."

One might even say rather conveniently.

During the same period, Texas state securities regulators uncovered more evidence of money laundering by Stanford entities. But because it involved offshore banks, they "referred it" to the FBI and SEC.

Texas Securities Commissioner Denise Voigt Crawford told a Senate Finance Committee last year, "Why it took 10 years for the feds to move on it, I cannot answer."

Miffed by government foot-dragging, Crawford added, "We worked with the FBI and the SEC and basically gave them the case. We told them what we'd seen and they were going to run with it."

But that investigation died on the vine.

Echoing similar themes, The Observer disclosed an FBI source close to the investigation confirmed that the Bureau "was looking at links to international drug gangs as part of the huge investigation into Stanford's banking activities."

The Observer reported that Mexican authorities seized one of Stanford's private jets in connection with alleged links to the Gulf cartel and said that "cheques found inside the plane were linked to the cartel, which is one of the most violent criminal organisations in the world."

DEA sources told the London newspaper "there may well have been a trail connecting his Mexican affairs to narco-trafficking interests." However, a second DEA official told The Observer, "I think we'll find that any possible drug-related trail and SEC priorities are not all in the same frame."

A curious statement considering the billions of dollars in fraudulent activities alleged against the bank, some of which may have been derived from laundering drug money.

One would assume that evidence of serious wrongdoing would be motive enough to take a hard look at the allegations and not concoct a fairy tale that these charges lie "buried in the paperwork"!

A U.S. drug enforcement official told The Observer, "Any major US interest seeking to avoid fully disclosed investments would have to go to pretty careful lengths to avoid encountering cartel interests."

"Anyone seeking to conceal or launder money would find it in safe and lucrative hands were they to forge alliances with, rather than skirt, the cartels," The Observer noted, and would "find them accommodating in terms of remuneration." The official hastened to add, it's "nothing anyone will confirm for Stanford right now."

The question is: why?

A Full-Service Bank

One possible answer may revolve around charges that SIB's Venezuela branch was a conduit for laundered CIA funds.

If true, then the Agency would be dead set against trial disclosures that revealed the bank had been involved in laundering drug money, particularly if narcotics syndicates are playing a role in U.S. destabilization efforts there.

Months before Stanford's empire collapsed, Venezuela's socialist government launched a raid on SIB offices in Caracas.

The Daily Telegraph reported that "Sir Allen Stanford, the Texan billionaire... is now at the centre of an international spying row."

The conservative British newspaper disclosed that "officials from Venezuelan military intelligence raided a branch of his offshore bank over claims that its employees were paid by the CIA to spy on the south American country."

Although corporate media in the U.S. dismissed Venezuelan allegations as propaganda, questions persist.

While on a charm offensive before his arrest last year, Stanford gave an interview to CNBC's Scott Cohn. When asked about claims that his bank may have been a cut-out for the Agency, this curious exchange took place:

Cohn: "You just by nature of your position and where you were got to know a lot of people in Latin America, in Africa, in Europe, around the world, and it strikes me that somebody in your position would be useful to the authorities in the US trying to find out what was going on there, what was going on in places like Venezuela. Can you tell me about any sort of role you played that way, were you helpful to the authorities in the US?"

Stanford: "Are you talking about the CIA?"

Cohn: "Well, you tell me."

Stanford: "I'm not going to talk about that."

Cohn: "Why not?"

Stanford: "I'm just not going to talk about that."

Cohn: "Well, I mean, am I--is my premise correct that someone in your position would be helpful to those who wanted to know what was going on?"

Stanford: "I really don't have anything to add to that that would be of any value."

Stanford's reticence is certainly understandable, considering Frank Hand's fate 30 years ago.

During a similar scandal when the CIA-linked Nugan Hand bank collapsed amid charges of fraud and drug money laundering, the chief executive turned up dead in his Mercedes with a shot to the head.

Despite evidence uncovered by investigations going back to the 1980s, drug money laundering charges or any reference to Agency activities will not figure in the Justice Department's case when Stanford goes on trial in January.

As ABC News delicately put it, SEC action against Stanford "may have complicated the federal drug case."

Underscoring the federal government's reluctance to explore this dark corner of Allen Stanford's career, it might do well to keep in mind what one airline executive told investigative journalist Daniel Hopsicker during his probe into the 9/11 attacks.

"Sometimes when things don't make business sense, its because they do make sense... just in some other way."

Source.

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

Bush's ambassador to eastern Caribbean protected Stanford operations

	July 30, 2010 Mary K. Ourisman, the Texas-born socialite wife of Maryland car dealer Mandy Ourisman, helped provide diplomatic and legal cover for jailed former Stanford International Bank chief Allen Stanford, according to Stanford insiders who spoke to us. Mary Ourisman was George W. Bush's ambassador to Barbados and the Eastern Caribbean States, which include Antigua and Barbuda, the headquarters for Stanford's one-time global banking and financial services empire that collapsed in 2009 after it was discovered to be a Ponzi scheme...
Indicted financier R. Allen Stanford, accused of leading a $7 billion investment fraud scheme.
Stanford is in prison in Texas and has been refused bail as a flight risk -- Stanford is also a citizen of Antigua and Barbuda. He is scheduled to go on trial in January 2011, conveniently two months after the congressional election in November. Stanford's campaign contributions fell into the coffers of congressional members of both Democrats and Republicans. However, as we previously reported, Stanford International Bank, Bank Al-Madina in Lebanon and Billions of syphoned monies from the Iraq and Afghanistan campaigns, also became a replacement for the collapsed Bank of Credit and Commerce International (BCCI) as a vehicle for drug money laundering and other covert operations on behalf of the CIA and other intelligence agencies... Mary Ourisman, a political fundraiser for Bush and other GOP candidates and a close friend of former First Lady Laura Bush, became U.S. ambassador to Barbados and the Eastern Caribbean States in 2006. In her job, Ourisman ensured that Stanford's financial operations in Antigua and Barbuda, as well as in two other Caribbean nations where she was credentialed as ambassador, St. Kitts-Nevis and St. Vincent and the Grenadines, were protected from federal regulators. To provide even more protection for Stanford's money laundering and other covert operations, Stanford showered GOP and Democratic senators with large campaign contributions, including $83,000 for John Cornyn of Texas and $950,000 for the Democratic Senate Campaign Committee, and particularly, Bob Menendez of New Jersey. Menendez, who maintains close connections to the Cuban exile community in Florida and new Jersey and its CIA/MOSSAD veteran operatives, has refused to investigate the Stanford fraud on behalf of its victims and has tried to block any Senate investigation of Stanford's links to the CIA/MOSSAD and top government officials, Democratic and Republican. It is also noteworthy that Texas was the only U.S. state to have entered into a financial regulatory agreement with Antigua. The Texas Department Banking and the Antigua and Barbuda International Financial Sector Regulatory authority signed the agreement on July 26, 2001. More amazingly, the agreement was signed while Antigua was subject to a U.S. Treasury advisory warning of potential fraud. Ourisman sat idly in Bridgetown, Barbados as Antigua's Attorney General, Errol Cort, who had also been Stanford's personal attorney on the island, changed the island nation's money laundering laws to the benefit of Stanford and his CIA/MOSSAD overseers, without a peep from any of the regulatory agencies in Washington. Cort, who is now the National Security Minister of Antigua and has used his position to make things uncomfortable for Stanford fraud investigators traveling to the island, also served on the board of the Eastern Caribbean Central Bank, which took over Stanford's Bank of Antigua after Stanford empire collapsed in 2009. Stanford had become a political kingpin in Antigua, exercising influence over the previous Lester Bird government and its successor, the present Baldwin Spencer government -- without any interference from Ourisman in Barbados or the State Department of stooges of CIA... Even today, Antigua's ambassador to the United States, Debra-Mae Lovell, the wife of Antigua's corruption-tainted Finance Minister Harold Lovell, spends most of her time in Washington acting as a public relations flack for Antigua and ridiculing the former Stanford investors who were defrauded by the Ponzi scheme -- a scheme facilitated by a corrupt Antiguan government. Secretary of State Hillary Clinton, more concerned about the continuation of U.S. military basing rights on Antigua, has warmly embraced Ambassador Lovell and members of her government and has lavished hundreds of millions of dollars of aid on Antigua. The bodies have piled up among those who were most familiar with Stanford's operations. On February 25, 2009, we reported, "No one will ever know just how Charlesworth Shelley Hewlett, who ran CAS Hewlett & Company out of a small office sandwiched between fish and chips shops on South Bury Road in Enfield in north London, came to be the accountant for Allen Stanford's $50 billion financial empire that included Stanford International Bank (SIB). That is because Mr. Hewlett, known as a quiet gray-haired man to those who had offices in his north London office block, died 'peacefully'... with help from CIA goons, a few weeks before the Stanford scandal hit the front pages. Hewlett was 73 but no one knows the reason for Hewlett's death." Hewlett also maintained an office on St. John's Street, in St. John's, the capital of Antigua. Stogniew, who headed a one-man company in Florida, Stogniew and Associates, provided risk analysis services for Stanford. Stogniew produced a flimsy three-page risk analysis report for Stanford in 2003. It mostly consisted of disclaimers. Gerry Stogniew, who founded his company in 1980 and resided in Seminole, Florida, died in July 2008... The firm was taken over by Stogniew's daughter and CIA... Oddly, the professional staff for Stogniew and Associates are only listed by their initials. Federal Election Commission records indicate Stogniew donated to the campaigns of George H. W. Bush in 1987 and Florida Republicans Bill McCollum in 1999 and Katherine Harris in 2005. Allen Stanford and Mary Ourisman shared more than an interest in protecting Stanford International Bank from nosy regulators: they were both born in the small Texas town of Mexia, Ourisman in 1946 and Stanford in 1950. The town's other "famous" celebrity: the late Anna Nicole Smith, who died from a suspected lethal drug overdose in Hollywood, Florida in 2007...

Source.

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

Stanford fraud - Summary Chart

	July 30, 2010 The document lists the Stanford International Bank, Ltd. (SIBL) of Antigua and Barbuda depositors by country of origin. Depositors from 114 countries, including the United States, China, and Israel are listed. The most surprising depositor listed was from Bouvet Island, a wind-swept and foreboding uninhabited and volcanically-active Norwegian island in the south Atlantic between South Africa and Antarctica. There is a reported Norwegian unmanned weather station on the island.
Bouvet Island is an unlikely place to find a Stanford International Bank depositor.
The use of Bouvet Island as a pass-through for investments in SIBL adds to the suspicions that Stanford’s bank became the new Bank of Credit and Commerce International (BCCI) for various intelligence agencies, including the CIA, Britain’s MI-6, and Mossad, for narcotics money laundering, weapons smuggling, and illegal payments to CIA and other intelligence and criminal syndicate clients around the world. A spokesman for the Norwegian embassy in Washington, DC expressed surprise at the revelation that its uninhabited island had a depositor in SIBL in Antigua. Additional information from the Norwegian government on the possible use of one of its uninhabited dependencies for international money laundering has been requested. "The depth of the failure at the SEC in the Stanford investigation is unbelievable," said U.S. Sen. David Vitter, R-La. Vitter added that he is pushing for a Senate Banking Committee hearing on Kotz’ report in September because: "The one thing that is clear from the report is that the debt the SEC owes the Stanford victims is enormous." "I urge the SEC to act swiftly in correcting these wrongs, so these families whose retirement and savings were stolen as a result of greed and government failure can begin rebuilding their lives," U.S. Rep. Charlie Melancon said.

Summary Chart

Source: http://sivg.org/article/summary_chart.html

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

Stanford International Bank became a new BCCI

July 25, 2010

WMR has learned from knowledgeable sources who have attempted to locate the global assets of the now-defunct Stanford Financial Group and its parallel Stanford International Bank, Ltd. in the Caribbean nation of Antigua and Barbuda, that the global entity resembles the former "bank of choice" for the CIA, the Bank of Credit and Commerce International (BCCI).

BCCI's fortunes began to turn sour in 1988 when its involvement in money laundering began to become public. A few years earlier, Allen Stanford moved from Texas to the Caribbean island of Montserrat to start up Guardian International Bank. Stanford's bank later abandoned Montserrat and moved to Antigua where it was re-named Stanford International Bank. As BCCI began to crumble, Stanford was able to pick up the pieces.

Within ten years, Stanford Financial Group had replaced BCCI as the company of choice for "The Company," the CIA.

Investigators who have delved into the records of Stanford reveal, "for more than twenty years, multiple US government agencies watched on as Allen Stanford built a global web of fraudulent financial companies that were managed from Stanford's corporate headquarters in Houston, Texas. The lynch pin of the Stanford fraud was of course, the offshore bank in Antigua - Stanford International Bank (SIB)."

The Israeli Connection to Stanford

When SIBC went into receivership, court documents show that among SIBC's depositors was Yair Shamir, the chairman of Israel Aircraft Industries (IAI), the managing partner of the Catalyst Fund -- an Israeli venture capital firm that funds many U.S. defense and aerospace firms, the former chairman of El Al Airlines, and a former Colonel in the Israeli Air Force. Shamir is also politically powerful as he is the son of former Israeli Prime Minister Yitzhak Shamir.

Shamir has had his own run-ins with the U.S. Securities and Exchange Commission (SEC), which were settled on January 26, 2009 - just three weeks before the SEC filed a massive securities fraud suit against Stanford. Catalyst Fund investors are European banks, some of which are being sued for their involvement as correspondent banks for SIBL. In 2006, Stanford invested in a company funded by the Catalyst Fund, Cyalume, which makes products that utilize a chemical reaction to produce light. According to an SEC filing, most Cyalume's revenue is from contracts with the U.S. military and NATO. At the time of insolvency, Stanford Financial Group owned 6.66% of Cyalume's stock. Other Cyalume shareholders include Ehud Barak, Israel's Minister of Defense and Deputy Prime Minister, former vice chief of staff for the US Army General Jack Keane, and retired US Navy Commander in Chief, Pacific fleet, Admiral Archie Clemins.

Cyalume's on-line biography if Shamir states: "Yair Shamir has been a director of Cyalume since December 19, 2008. Mr. Shamir is the Chairman and Managing Partner of Catalyst Investments and the Chairman of IAI, Israeli Aerospace Industries. From 2004-2005, Mr. Shamir was Chairman of El Al, Israeli Airlines and lead the privatization process of the firm. From 1997-2005 Served as Chairman and CEO of VCON Telecommunications Ltd. From 1995 to 1997, Mr. Shamir served as executive vice president of the Challenge Fund-Etgar L.P. From 1994 to 1995, he served as Chief Executive Officer of Elite Food Industries, Ltd. From 1988 to 1993, Mr. Shamir served as Executive Vice President and General Manager of Scitex Corporation, Ltd. Mr. Shamir served in the Israeli Air Force as a pilot and commander from 1963 to 1988. During his term in the Air Force, Mr. Shamir attained the rank of colonel and served as head of the electronics department, the highest professional electronics position within the Air Force. He currently serves as a director of DSP Group Corporation and also serves as director of a few private hi-tech companies. Mr. Shamir holds a B.Sc. Electronics Engineering from the Technion, Israel Institute of Technology.

Mr. Shamir also served as a member of the board of directors of Mercury Interactive, LLC from 1997 to 2005. In September 2008, Mr. Shamir settled a complaint filed by the SEC which alleged that certain independent directors of Mercury (including Mr. Shamir) recklessly approved backdated stock option grants and reviewed and signed public filings that contained materially false and misleading disclosures about the company's stock option grants and company expenses. Without admitting or denying the allegations in the SEC's complaint, in order to settle the charges against them, each of the independent directors implicated (including Mr. Shamir) agreed to permanent injunctions against violating certain provisions of the securities laws, paid a financial penalty, and retained the ability to serve as a director or officer of U.S. public companies."

WMR has earned from defrauded Stanford customers that on December 19, 2008, Cyalume entered into a $33 million credit arrangement with Toronto Dominion Bank, which accepted the billions of dollars of wire transfers to fund Stanford International Bank CDs (it is noteworthy that none of the money to purchase Stanford International Bank CDs never actually made it to Antigua and SIB never held any funds – Toronto Dominion [TD Bank]accepted wires to fund CDs and then transferred the funds to bank accounts in Houston). Stanford Financial Group CFO James Davis, who plead guilty in August 2009, went to Israel to meet with Shamir and Prime Minister Netanyahu in the fall of 2007.

A substantial portion of the depositors in SIB are Venezuelan citizens who hid their funds off-shore to avoid taxation by Venezuela's government of President Hugo Chavez. Antigua announced it was completing its acquisition of West Indies Oil Company (WIOC) with a $68 million loan from Venezuela's state-owned oil firm, PDVSA, to PDV CAB, a private company for which Antigua is the sole shareholder. Antigua already owned 25 percent of the shares of WIOC. There is yet another Israeli angle, along with a link to BCCI, in Stanford's Caribbean operations.

The other 75 percent of WIOC was owned by Bruce Rappaport, an Israeli-born Swiss citizen and billionaire shipping giant and banking tycoon who owned the Inter Maritime Bank in Geneva, which was used to provide payments to BCCI during the Iran Contra scandal. Rappaport died in January 2010. The New York Times reported Rappaport was close friends of the former CIA director William Casey, who was implicated in both the Iran-Contra and BCCI. Rappaport owned companies in more countries than can be tracked, all with obscure names that are just acronyms. According to The Times, Rappaport was a big financial backer of the Iraq oil pipeline project in the 1980s and was hired by Iran to lobby the United States to help get some kind of assurance if they built the 540 mile oil pipeline to Israel that the Israelis wouldn't just damage it like they did during the Iran/Iraq war. A State Department statement on the topic said, 'Iran had destroyed Iraq's oil terminals in the Persian Gulf early in the Iran-Iraq war. The proposed 540-mile pipeline, running from Iraq's Kirkuk oil fields to the Jordanian port of Aqaba near the Red Sea, would have more than doubled that nation's oil exports. It also would have been a 'trade bonanza' for the United States and the companies seeking to build it.'"

WMR learned from sources close to Mossad that one of the chief Iraqi interlocutors on the pipeline deal was then-Iraqi Foreign Minister Tariq Aziz, now imprisoned and in failing health in an Iraqi prison recently transferred to Iraqi government control from the U.S. military occupation authorities.

Rappaport served as Antigua's ambassador to Israel under former Antiguan Prime Minster Lester Bird, whose administration ended in 2004 when Prime Minister Baldwin Spencer ended the Bird family's long reign of ruling the island since independent from Great Britain. Lester Bird had illegally sold Rappaport 75 percent of WIOC in the 1980s, which was only revealed to the citizens of Antigua in a New York Times article, which sparked tremendous controversy and eventually led to a lawsuit filed by Prime Minister Spencer against Rappaport, Bird, and several other Antiguan officials.

In February 2009, just two days before the SEC filed its suit against Stanford, Rappaport paid the Antiguan government $12 million to settle a $45 million lawsuit filed by the Spencer administration for a scandal involving WIOC. The suit alleged that Rappaport-owned IHI, a debt settlement company in Hong Kong, had loaned Antigua $45 million in 1996 as part of the debt consolidation. The terms of the loan specified a 25-year term with payment of $400,000 per month, of which only $200,000 was actually going to IHI. The other $200,000 per month was going to Lester Bird. Antiguan member of Parliament Asot Michael, a defendant in the suit, was represented by Hunton & Williams, the law firm based out of Virginia that also represented Allen Stanford and Stanford International Bank and has refused to release files to the U.S. Justice Department. Stanford's trial is not scheduled to begin until January 2011.

The International Monetary Fund cited the SEC lawsuit in the April 2009 country report on Antigua, saying there was corruption within the government. The report referenced no "recent" expropriation of property, despite Antiguan court proceedings to "compulsorily acquire" 49 Stanford-owned properties two months prior.

Democratic and Republican Party Connections to Stanford's Antigua scam

Ross Gaffney, a former FBI agent who oversaw a task force investigating Stanford's operations in the late 1980s at his first offshore bank, Guardian International in Montserrat, explained the FBI had "solid intelligence" on Stanford's alleged money laundering activities in the late 1980s. And, while that intelligence was enough to get Stanford's banking license revoked in Montserrat, Gaffney said the Justice Department would have never have been able to successfully prosecute the charges because of the circuitous route the funds took to get to Guardian International. According to Gaffney, Stanford was laundering money for the Medellin drug cartel and the money would go from Colombia through Ecuador and through several shell companies and correspondent banks before being deposited in Guardian in Montserrat.

WMR previously reported that Stanford was protected in Ecuador by Peter Romero, Stanford Financial Group's Advisory Council member and former US Ambassador to Ecuador and Assistant Secretary of State for Western Hemisphere Affairs in the Clinton administration. Other possible "helpers" on Stanford's Advisory Council were Jorge Castaneda, the former Mexican Foreign Minister; Lee Brown, Drug Czar for the Clinton administration and former mayor of Houston; Adolf Ogi, former president of Switzerland; and Alfredo Arízaga, former minister of finance of Ecuador.

This complex pattern of international involvement, as well as Allen Stanford's high profile associations with numerous U.S. government officials lend credibility to what Atlanta journalist Robert Coram laid out in his 1993 book, Caribbean Time Bomb: The United States Complicity in the government of Antigua – and perhaps explains it all:

"Any U.S. military aircraft, or aircraft owned by the CIA, DEA, or other agencies, can land on Antigua without prior notice, without prior approval, without the crew having to go through Antiguan Customs, and without any record being kept of the landing. This unusual arrangement is invaluable for all sorts of mischievous operations in the Caribbean and Central or South America. U.S. special operations troops have exercises in Antiguan waters and are given considerable latitude in large parachute drops and in storming beaches. Until a few years ago, they were allowed to blow up reefs as part of their training. The price to play in this little sandbox appears to be that Uncle Sam will ignore all shenanigans of the Antigua government, including abuse of its own citizens."

On June 8, 2010, the IMF announced it had finalized a $117 million loan to Antigua. The U.S. Director of the IMF voted in favor of the loan!

In November 2009, Senator Richard Shelby, with seven bipartisan co-sponsors, introduced a Senate Resolution to block aid to Antigua until it released the Stanford properties, and paid all outstanding loans and other payments made by Stanford "for the purpose of subverting regulatory oversight." The Resolution stated, "it is the sense of the Senate that the Secretary of the Treasury should direct the United States Executive Directors to the International Monetary Fund and World Bank to use the voice and vote of the United States to ensure that any loan made by the International Monetary Fund or the World Bank to the Government of Antigua and Barbuda is conditioned on providing complete redress to the victims…." The Resolution was referred to the Senate Foreign Relations Committee, which has agreed to hold a hearing on this issue on July 29, but they will not invite the IMF, the Treasury Department, or the State Department to testify. The Obama administration appears intent on burying the Antigua and Stanford issue far into the ground. A House of Representatives companion to the Senate Resolution was introduced in the House of Representatives on March 2, 2010, by Representative Mike Coffman (R-CO), on behalf of Natalia Querard of H.M.B. Holdings Limited. Querard, an American citizen who had her property, the Half Moon Bay Resort, stolen from her in 2002. Nothing has happened with the House Resolution.

Adding insult to injury, on June 10, 2010 Secretary of State Hillary Clinton announced an additional $162 million in humanitarian aid for AIDS and H.I.V. treatment in Antigua, on top of the already committed Caribbean Basin Initiative funds allocated for this year. In a joint speech with Antigua's Prime Minster Baldwin Spencer, Clinton promised increased US participation in the Eastern Caribbean region as she said "We are back 100 percent….We are back and we are committed." Spencer responded with "our futures are intertwined." The $162 million allocated mid-year in the middle of a spending freeze is coming from the Department of Defense. A July 1, 2010, New York Times article titled "Slump Cripples Aid for Drugs to Treat H.I.V." discusses how thousands of Americans from across the country with H.I.V. and AIDS are on waiting lists and being denied medical treatment because of a lack of funding.

Source.

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

Allen Stanford's Girlfriend Stoelker Sued by Receiver for Wages, Payments

Jun 30, 2010
By Laurel Brubaker Calkins

Stanford's girlfriend, Andrea M. Stoelker, was sued by the indicted financier's court- appointed receiver for $560,000 that she received in wages and other payments from the Stanford Financial Group of companies.

Stoelker's services, including her work on Stanford's Caribbean cricket subsidiary, were of no value to creditors, said Kevin Sadler, lead attorney for Stanford receiver Ralph Janvey, in papers filed today in federal court in Dallas.

"Any services performed by Stoelker were designed to further the operations of the Ponzi scheme and may well have assisted Stanford in attracting new victim investors," Sadler said in the filing.

Stoelker, who is identified by Sadler as Stanford's "girlfriend and/or fiancée," said in her own court filings that she often accompanied Stanford on international business trips and Las Vegas vacations. She also sought, and was denied, the return of her personal belongings taken from Stanford's yacht when his assets were frozen by court order and turned over to Janvey in February 2009.

Stanford is in federal prison in Houston awaiting a January trial on charges that he swindled investors of more than $7 billion through allegedly bogus certificates of deposit issued by Antigua-based Stanford International Bank Ltd.

Mansions, Jets, Yachts

Stanford faces parallel civil fraud allegations from the U.S. Securities and Exchange Commission, which claims he skimmed more than $1 billion in investor funds to finance a lavish lifestyle that included multiple mansions, a fleet of jets, two yachts and a private island. Stanford has denied wrongdoing.

Stoelker was "unjustly enriched" while serving as president of both Stanford Financial Group Global Management LLC and Stanford 20/20, according to the lawsuit. The 20/20 organization promoted a faster version of cricket, which the financier hoped would attract a wider following to the sport. Stoelker received at least $140,000 from the cricket unit and another $180,000 from Stanford personally, Janvey claims.

Stoelker previously attended many of Stanford's court appearances. She was refused court permission to visit Stanford in prison.

The case is Janvey v. Stoelker, 3:10-cv-01272, U.S. District Court, Northern District of Texas (Dallas).

Source.

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

The US government can be sued on account of the fantastic negligence of the SEC

June 16, 2010

Information, as expected, has been coming out, even if slowly. Inparticular, excellent sources of information and ideas seem to include the SEC Inspector General's two Reports on the Madoff case; the IG's two reports on the all too analogous Stanford scam; and complaints, among others, filed against J.P. Morgan Chase, against a money manager, now owned by the Bank of New York, called Ivy Asset Management, against Banco Santander, Price Waterhouse and subsidiaries or components of each, and against the SEC. There have also been two legal opinions of consequence (aside from Judge Lifland's opinion on net equity, which can be ignored for present purposes). Both involve governmental immunity under the Federal Tort Claims Act: one is in a California case asserting the SEC's negligence in Madoff, and the other is in a case involving the negligence of the Army Corps of Engineers that led to the destruction of New Orleans during Hurricane Katrina.

One can have high confidence in the information and ideas in the SEC Inspector General's reports, of course. Necessarily, one should not have as high a degree of confidence in the complaints, because they are adversary documents and are comprised of allegations rather than of truths shown by evidence at trial. Yet most -- even nearly all -- of what they say has the ring of truth (and some of it, even much of it, is known to be true on the basis of priorinformation).

As for what is said in the two opinions, one is an intelligent assessment of what is necessitated by modern conditions. The other is simply imbecilic.

These various informational sources are relevant to several issues I would like to discuss in a two-installment post. The issues are important because they already are involved in major suits or are likely to be involved in suits that will be filed in future. One could write huge amounts about the involvements, about the relationships. Ishall, however, try to confine myself by and large to only the most crucial points, which tend to get buried in the clouds of words appearing in the formal documents written by lawyers and judges.

Let us begin with the issue of the government's liability arising from the unbelievable negligence of the SEC. This is an issue on which, as is common in the legal profession, many lawyers waxed definitive when the Madoff case broke. Lawyers were quick to confidently say, on the basis of very little if any knowledge, that the government cannot be sued. The accuracy of this highly confident but knowledge-free reaction is open to serious doubt.

The problem arises because there is a medieval doctrine called sovereign immunity, under which the government cannot be sued. Though the doctrine is a relic of the days of kings and is wholly inconsistent with the rule of law, it is still followed in many instances. And, at bottom, it is this doctrine that accounts for the lawyerish knee-jerk reactions against the possibility of suit based on the SEC's horrendous conduct.

However, the doctrine of sovereign immunity has been waived by Congress in the Federal Tort Claims Act for matters that fall within that Act. Governmental negligence is one such matter, so under the waiver the government can be sued on account of the fantastic negligence of the SEC.

The waiver does not apply, however, if the matter involved is based on thepolicy of a given statute or statutes (like the various federal securities acts) and/or is a matter in which a government agency had discretion. The two ideas are often run together; there is no waiver, for example, if a governmental action, though it ultimately proved unsuccessful or even negligent, was within an agency's discretion in seeking to carry out the policy of a statute (such as the securities acts). So the question here is going to come down to whether, in conducting itself with horrible negligence, the SEC was acting within the policy of the securities laws and/or was exercising legitimate, permissible discretion in its enforcement of those laws.

One would think that, as the old saying goes, to put this question is to answer it. A powerful policy of the securities laws is to protect investors against fraud. It is utterly bizarre to argue that SEC personnel could be acting inaccordance with the policy of the securities laws, rather than against such policy, by conducting themselves with such fantastic negligencet hat thousands or maybe even tens of thousands of people were defrauded out of their money instead of the fraud readily being caught and stopped by investigatory methods so simple that they are highly conventional -- methods such as (among many others) contacting counterparties to see if transactions had in fact occurred, contacting the Depository Trust Company to find out what securities Madoff held in his account there, contacting the NASD to see what trades he hadengaged in, and determining (as various large funds did), whether therewere enough options to cover his alleged strategy. It is correlatively and equally bizarre to say that SEC personnel had discretion to negligently fail to take even the most conventional investigatory steps and to thereby negligently thwart the deep seated securities lawpolicy of stopping fraud.

...More than enough said. The Katrina decision makes clear that there should be no immunity for the government in the Madoff and Stanford cases on the ground that the SEC's horrible negligence in the two cases was an exercise of permissible discretion in accordance with the anti fraud policy of the securities laws. As in the Katrina case, the government violated professional standards. As well, instead of protecting citizens as it was supposed to do under the statutory policy, the SEC opened the door to terrible injury to untold numbers of citizens. The government's argument would vitiate the FTCA's waiver of sovereign immunity in negligence cases because every investigatory and prosecutorial action and decision of the SEC, no matter how abysmal and negligent, would be turned into an exercise of permissible discretion. The SEC's negligent actions were not the kind of actions Congress intended to protect -- they were the exact opposite (as further shown, I note, by the furious Congressional outcry against the SEC when its misconduct regarding the disastrous Ponzi schemes came to light). And the government's arguments are merely ex post putative rationalizations to try to escape liability for a degree of negligence that boggles the mind.

Source.

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

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.

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

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/