Sir Robert Allen Stanford , KCN (born March 24, 1950) is a prominent financier, philanthropist, and sponsor of professional sports who has been charged with fraud. Stanford is the chairman of the privately held, wholly owned Stanford Financial Group of Companies. A fifth-generation Texan who resides in St. Croix, U.S. Virgin Islands, he holds dual citizenship, being a citizen of Antigua and Barbuda and a United States citizen. Stanford was the first American to be knighted by that Commonwealth nation and was presented with the honor by the then Governor-General of Antigua and Barbuda, Sir James Carlisle.
In early 2009, Stanford became the subject of several fraud investigations, and on February 17, 2009, was charged by the U.S. Securities and Exchange Commission with fraud and multiple violations of U.S. securities laws for alleged "massive ongoing fraud" involving $8 billion in certificates of deposits. The FBI raided three of Stanford's offices in Houston, Memphis, and Tupelo, Mississippi. On February 27, 2009, the SEC amended its complaint to describe the alleged fraud as a "massive Ponzi scheme". He was arrested by the FBI on June 18, 2009.
Biography
Early years
Stanford grew up in Mexia, Texas. His father, James Stanford, is former mayor of Mexia and a member of the Board of Directors of Stanford Financial Group. His mother, Sammie, is a nurse. After his parents divorced in 1959, Stanford and his brother went to live with their mother. Both of his parents remarried.
James' father, Lodis Stanford, began as a barber and became an insurance salesman. In order to provide credibility to his company, Allen Stanford falsely stated that his grandfather started Stanford Financial Group in 1932. Stanford Financial’s clients are affluent investors, institutions, and emerging growth companies throughout the world. Assets under management or advisement are in excess of US$8 billion.
Stanford graduated from Eastern Hills High School in Fort Worth, Texas. In 1974, Stanford graduated from Baylor University in Waco, Texas, earning a Bachelor of Arts degree in finance.
Knighthood
A February 2009 Houston Chronicle article described Stanford as "the leading benefactor, promoter, employer and public persona" of Antigua and Barbuda. Knighted by the country in 2006, Stanford uses the title "Sir Allen." Antiguans also generally refer to Stanford using the title. In October 2009 the National Honors Committee of Antigua and Barbuda voted unanimously to strip Stanford of his knighthood, and informed the prime minister of this decision on October 26. For the decision to take effect, the prime minister must forward it for action to the Governor General who will then ratify it. On Monday November 2, 2009 said recommendation was forwarded to the Governor General.
Family and personal life
In November 2008, Stanford denied rumors that he had fired his girlfriend, Andrea Stoelker, the president of Antigua's 2008 Stanford Super Series tournament board of directors, reportedly after she had a liaison with Chris Gayle, the captain of the Stanford Superstars: "These rumors are complete horse manure. We've been together seven years and we're happier than ever." Stoelker had also been the manager of The Pavilion, a 5-star restaurant in Antigua owned by Stanford.
In April 2009, after an exclusive tour, Reuters reported that Stanford's office at the Houston headquarters of the Stanford Financial Group were adorned with a personal bathroom with a private exit, together with a sizeable bar in his massive office. Journalist Chris Baltimore summed it up as "a mass of marble and mahogany that once boasted a five-star dining room, movie theater, professional kitchen and wine bar. Every part of the building is grandiose, which speaks to the larger-than-life image Stanford created as a jet-setting financier, sports promoter and philanthropist."
Looking around the office, Baltimore found it "easy to just gawk because of the grandeur of the place":
Among several framed certificates hung on a wall is one with the gold seal of Antigua and Barbuda pronouncing Stanford Knight Commander, which allowed him to use the title Sir Allen Stanford, and a letter on White House stationery dated Jan. 25 2006, signed by then-President George W. Bush.
Then on to the bathroom -- a chamber of black granite and mahogany, with a gigantic mirror and granite countertop, flanked with shelves of fluffy white towels and toiletries, including a bottle of "Brilliant Brunette" shampoo.
Career
Stanford started in business in Waco, where he opened a bodybuilding gym, but it failed. His first success in business was in Houston real estate from the Texas oil bubble burst in the early 1980s. His partner in the real estate venture was his father James. In the 1980s, Stanford and his father made a fortune buying up depressed Houston real estate and selling it years later as the market recovered. When his father retired in 1993, Stanford took control of a company of 500 employees.
Stanford moved to the Caribbean in the 1980s, first to Montserrat and then to Antigua. With the Stanford Finance, he started a bank on the island of Montserrat in 1985, Guardian International Bank, which he moved to Antigua during a British crackdown on Montserrat's offshore-banking industry in 1980s and renamed Stanford International Bank, an affiliate of Stanford Financial.
In early 2007, Stanford and Baldwin Spencer, the prime minister of Antigua and Barbuda and a former Stanford ally, began verbally feuding in public.
In 2009, Antigua's Financial Services Regulatory Commission has named a British firm, Vantis Business Recovery Services, as a receiver of Stanford International Bank and Stanford Trust Company, the Associated Press reported.
Legal troubles
Fraud allegations
Main article: Stanford Financial GroupReports surfaced in early February 2009 that the Securities and Exchange Commission, the Federal Bureau of Investigation, the Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority, a major U.S. private-sector oversight body, were investigating Stanford's company Stanford Financial Group, questioning the means by which Stanford International Bank manages consistently to make higher-than-market returns to its depositors. A former executive told SEC officials that Stanford presented hypothetical investment results as actual historical data in sales pitches to clients. Stanford claimed his CDs were as safe as, or safer than, US government-insured accounts.
Federal agents raided the offices of Stanford Financial on February 17, 2009, and treated it as "a kind of crime scene—cautioning people not to leave fingerprints."
The Securities and Exchange Commission charged Allen Stanford with "massive ongoing fraud" centered on an eight-billion-dollar investment scheme. Stanford's assets, along with those of his companies, were frozen and placed into receivership by a U.S. federal judge, who also ordered Stanford to surrender his passport.
CNBC later reported that Stanford tried to flee the country on the same day as the raids on his headquarters: he contacted a private jet owner and attempted to pay for a flight to Antigua with a credit card, but was refused because the company would accept only a wire transfer.
FBI agents, acting at the request of the SEC, on February 19 located Stanford at his girlfriend's house near Fredericksburg, Virginia, and served him with civil legal papers filed by the SEC. Stanford was not arrested until June 18, 2009. Stanford has surrendered his passport to federal prosecutors, and he has hired the prominent criminal defence lawyer Brendan Sullivan, who represented Oliver North. The SEC often files civil charges before criminal charges are filed.
Following the allegations, various governments have taken over Stanford's business operations. The Eastern Caribbean Central Bank (ECCB) announced that it has taken over the local operations of the Bank of Antigua (BOA) which will be renamed the Eastern Caribbean Amalgamated Bank (ECAB). The Venezuelan Government also took over local operations of Stanford's bank in that nation.
On February 27, the SEC said that Stanford and his accomplices operated a "massive Ponzi scheme", misappropriated billions of investors' money and falsified the Stanford International Bank's records to hide their fraud. "Stanford International Bank's financial statements, including its investment income, are fictional," the SEC said.
In an interview on April 20 at the law offices of Houston criminal attorney Dick DeGuerin, however, Stanford denied any wrongdoing. His companies had been well-run, he claimed, until the SEC "disembowelled" them.
On June 18, 2009, Stanford was taken into custody by FBI agents. According to DeGuerin:
Federal agents in black SUVs surrounded his girlfriend's house this afternoon, and just sat there. I told him to walk out and introduce himself. So he did, and he asked them, 'If you've got a warrant, take me into custody. If you don't, I'm going to Houston.' And they did, so they arrested him.On June 25, 2009, Stanford appeared in a Houston court and pleaded "not guilty" to charges of fraud, conspiracy and obstruction. His lawyer claimed that he, Stanford, had resorte