Stanford taken in on Ponzi allegations
A grand jury in Houston unseals an indictment today for Texas billionaire Allen Stanford, who surrendered to the FBI yesterday. The SEC accused Stanford of running an $8 billion Ponzi scheme through his bank in Antigua. Steve Henn reports.
The main entrance of Standford Bank headquarters in Caracas, Venezuela, owned by Texas magnate Allen Stanford (Pedro Rey/AFP/Getty Images)
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TEXT OF STORY
Steve Chiotakis: Texas billionaire Allen Stanford traded in the trappings of the financial aristocracy last night for a jail cell in Virginia. Stanford surrendered to the FBI yesterday outside his girlfriend's home and he'll appear this morning in federal court in Richmond. More now from Marketplace's Steve Henn.
Steve Henn: This morning, authorities will unseal an indictment handed down by a grand jury sitting in Houston, Texas.
Earlier this spring, the SEC accused Stanford in a civil lawsuit of running a $8 billion Ponzi scheme through his bank in Antigua. Stanford had been marketing high-yield certificates of deposit to wealthy clients looking for a refuge from turbulent stock markets. He allegedly used money from new investors to inflate returns.
But prior to the SEC fraud case, Stanford was best known as a high-flying, ostentatious Texan whose unlikely love of cricket was matched only by his love of the spotlight. He sponsored cricket tournaments in Antigua and trips to Bermuda for members of Congress on his private jets. Stanford still maintains his innocence.
In Washington, I'm Steve Henn for Marketplace.
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From Baton Rouge, LA, 06/19/2009
While Stanford may have dealt with some "wealthy clients" for sale of his CDs, most of the $1 billion in assets he culled from Louisiana was from people who had worked for 35, 40, 45 years and had invested their entire retirement savings of $450,000 to $500,000. They now have nothing for their retirement. They certainly were not "wealthy" at the time of their investing and they certainly are not "wealthy" now.
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