Tech & Biz

Stanford Financial Group $8 Billion 'Massive Fraud' Indictments

by Tina Kells | February 17, 2009 at 11:07 am

2858 views | 11 Recommendations | 3 comments

Three executives of the Texas based Stanford Financial Group, including bank head Robert Allen Stanford, have been handed a series of indictments by the Securities and Exchange Commission surrounding an $8 billion "massive fraud" involving subsidiary Stanford International Bank.

Robert Allen Stanford, the chief of the Stanford Financial Group, on Tuesday of conducting “a massive ongoing fraud” in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. Also named in the suit were two other executives and some affiliates of the financial group.

Also indicted in the ongoing fraud case are James M. Davis, director and chief financial officer of Stanford Group and an Antigua based banking affiliate, and chief investment officer of these companies, Laura Pendergest-Holt.

Central to the SEC complaint, which was filed in Federal District Court in Dallas, are allegations that Stanford, Davis and Pendergest-Holt knowingly and deliberately misrepresented the value, security and liquidity of of uninsured CD's being sold by Stanford International Bank.

Stanford International Bank handles $8.5 billion in assets, and serves more than 30,000 clients in 131 countries. Both Stanford International Bank and parent company Stanford Financial have been named in the SEC complaint. Stanford Financial has $50 billion in holdings worldwide.

Shortly after 10 a.m. Central time, about 40 police officers and other law enforcement officials simultaneously entered Stanford Group’s two office buildings in Houston. Many of the law enforcement personnel carried large black briefcases. Stanford group’s headquarters are in two offices in Houston, one within a tower of the Houston Galleria shopping mall, and the other across the street.
A spokesman for Stanford Group declined to comment.

Law enforcement officials hung up two white signs stating that the offices of Stanford Financial Group was temporarily closed. “The company is still in operation but under the management of a receiver,” the signs read.

In its complaint, the S.E.C. said it could not account for the $8 billion in assets that were housed in the Antigua bank after issuing subpoenas for bank records and to various witnesses. Most witnesses, including Mr. Stanford, Mr. Davis and the Antigua-based bank’s president, failed to appear to testify and did not documents shedding light on the assets.

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Maireid Sullivan

at 18:32 on February 17th, 2009

There will be more revelations like this - and many who do the same will excape public scrutiny. This is history in the making.

Roy C

at 18:32 on February 17th, 2009

The attitude here is at the bottom of the whole financial mess we are in.

I just watched CNBC's "House of Cards". Great documentary. You get the whole picture.

Yeah, Bear Stearns is dead, but the people who made millions are still in their oversized homes talking about they aren't guilty of anyting in particular.

John Sammarco (not verified)

at 18:19 on February 20th, 2009

As the cash and credit drys up, its like draining a swamp. We're starting to see things we couldnt see before, and there will be more of this to come. Then, so long as the federal govt doesn't make things even worse with their socialist policies, the American Spirit will once again prevail --- and we will see better days.