The Six Billion Dollar Man

[Henk Elegeert]

REPLY TO: D66 at nic.surfnet.nl

Cees, Texaans bankieren dan ? ;)

"
 The Six Billion Dollar Man

When the people who run English cricket took Sir Allen Stanford's
money and allowed him to park his helicopter on their lawn as he
arrived amid a frenzy of excitement they said they had checked him
out.

They thought the tall Texan was perhaps a bit brash for their tastes,
but solid and, perhaps most importantly, solvent.

In Panorama: The Six Billion Dollar Man, we find out that Sir Allen
was not at all as he seemed.

More over, his story appears to be something of a metaphor for what
has happened in the wider financial world in recent months - a lack of
questions asked at the right time and then, suddenly, reality hits
smack between the eyes like a full toss from a fast bowler.

Twenty20

Sir Allen came to prominence last year when he sponsored a
high-profile Twenty20 cricket tournament, which culminated in a match
between England and an all-stars West Indies team that gave each
winning player $1m.

But in February of this year, the man who once boasted that "It's fun
being a billionaire", saw his empire begin to crumble.

[ STANFORD'S FINANCIAL EMPIRE
# The first Stanford company was founded in Texas in 1932 by Lodis B
Stanford, Sir Allen Stanford's grandfather
# Stanford Financial Group is a complex worldwide network of
affiliated financial services companies
# The group reports it has over $50 billion in assets
# Stanford International Bank, Antigua-based affiliate that claimed
$7.2bn in assets and 28,000 clients around the world. Sir Allen
Stanford is chairman and sole shareholder Sources: Panorama research,
corporate websites, Securities and Exchange Commission ]

 That was when the businessman, who operated mainly out of the
Caribbean island of Antigua, stood accused over a multi-billion dollar
investment fraud by US financial regulators.

The Securities and Exchange Commission (SEC) said the financier had
orchestrated "a fraudulent, multi-billion dollar investment scheme".

The SEC said the fraud was "based on false promises and fabricated
historical return data" and the Federal Bureau of Investigations
seized his passport.

Ten weeks after the SEC filed its civil complaint, no criminal charges
have been pressed against Stanford but the FBI is investigating and a
criminal case is expected. Meanwhile, off-shore investors around the
globe are holding on to near-worthless investment certificates.

This week, Panorama takes us to the place where it all began for Allen
Stanford, the Lone Star state of Texas, where his Stanford Group of
Companies empire was run.

Reporter John Sweeney notes that every aspect of the business features
Sir Allen's eagle and slash logo and the 12 floors of a gleaming
Houston office block that his enterprises once occupied smell of
money, success and bare-faced front.

'It's no Ponzi'
Sweeney explains how Sir Allen Stanford's considerable assets have
been frozen amid accusations that he ran an elaborate fraud or Ponzi
scheme - effectively robbing Peter to pay Paul.

[ “  Did this man, this Texan who basically said that our cricket was
rubbish land his helicopter here on the nursery ground at Lords? You
still have to almost rub your eyes as if it was a very bad dream  ”
Jonathan Agnew, BBC Sport cricket correspondent ]


Sir Allen has vigorously denied the accusations and has insisted in
interviews on American television that "It's no Ponzi".

The British receiver, Nigel Hamilton-Smith, called in by the
government of Antigua, when asked by Panorama if he has uncovered the
$7.2bn (£4.8bn) in deposits recorded in Stanford International Bank's
books, says: "Nothing like it."

When John Sweeney asks him outright: "Is Stanford International Bank
bust?", Hamilton-Smith responds, "Without a shadow of doubt". The
receiver added: "There is a deficiency of $6.7 billion."

Six Billion Dollar Man hears about Stanford's boyhood in the town of
Mexia, where he was born and raised in the Baptist church. Stanford's
first business was a chain of health clubs called Mr and Mrs Heath
Studios in nearby Waco. We meet his father, James Stanford, 88, who
still has complete confidence in both his son's abilities, and his
innocence.

In 1982 Stanford's health club business was made bankrupt and he
declared personal bankruptcy in 1984, owing $13m (£8.6m) at the time.

The future billionaire was down, but definitely not out.

In Miami, Rodney Gallagher, who advised the Foreign Office about
banking in the Caribbean, tells Panorama that he met Stanford in the
1980s.

"Allen Stanford was very much a marketing man," Mr Gallagher recalls.
"The image that comes across is one of a rather brash Texan. He's a
man who revels in business success and all its trappings. He saw
people who were obstacles as people who should be pushed out of the
way."

Reinvented

Sweeney tells us how Stanford the bankrupt transformed into Stanford
the banker, setting up shop as Guardian International Bank on the
small British colony of Montserrat - best known for its active
volcano.

The programme hears from Mr Gallagher that Montserrat was, at that
time, the place to be if you were looking for lax banking rules.

"The banking sector in Montserrat in particular was considered to be
out of control," he says of the climate at the time. "The overwhelming
majority were not banks of the sort that the British government would
have liked to have seen on the high street in Guildford."

Panorama obtained details of a secret 1990 Montserrat government
report that warns of Sir Allen's bankruptcy and raises suspicions that
he may be involved in money-laundering on a substantial scale.

"Alan (sic) Stanford is the prime force behind the bank's operations
and it has recently come to our notice that he is also a former
bankrupt…Its President has come under suspicion of money-laundering on
a substantial scale…a figure of $60 million has been mentioned," the
report states.

Stanford has always maintained that his Guardian International Bank
did nothing wrong.

But, frustrated by the authorities' threats to revoke his license, Sir
Allen moved his operations to the next island along, the former
British colony of Antigua and Barbuda.

We hear about Sir Allen's close relationship with former prime
minister Lester Bird and see how his banking empire bought up large
tracts of the tourist paradise.

In 1999, Allen made out a cheque for $3.1m to the US Drug Enforcement
Administration, money which had originally been deposited with the
Stanford International Bank by agents for the Mexican drug lord Amado
Carrillo Fuentes.

This is proof that Stanford International Bank did attract Mexican
drug money - whether or not Stanford knew about it at the time.

It is thanks to his close ties to former prime minister Bird that
Allen Stanford became 'Sir Allen' in 2006 - for his "services to the
community and economic development".

Follow the money

As his wealth grew in the Caribbean, his business expanded homeward to America.

Panorama travels back to Houston to meet a former colleague turned
critic who resigned from Stanford's company over concerns that the
real returns for clients were lagging behind those offered in
promotional material - perhaps the clearest early warning sign that
all was not as it seemed.

>From here, Panorama brings it home to Lord's Cricket Ground in London
- the ancestral home of cricket - and hear how Sir Allen managed such
a slick takeover of the game.

Jonathan Agnew, the BBC's cricket correspondent, describes those heady
days when big money from Texas met English cricket.

"Even now there's an air of disbelief about the whole thing. Did it
really happen? Did this man, this Texan who basically said that our
cricket was rubbish land his helicopter here on the nursery ground at
Lord's? You still have to almost rub your eyes as if it was a very bad
dream."

Agnew points out that other countries' cricket governing bodies had
taken a pass on a deal with Sir Allen.

"We thought our administrators had completely lost the plot. What they
were doing associating themselves with a man like Sir Allen Stanford
who'd already been turned down by South Africa, by India, and by
Australia. They didn't want anything to do with him."

Panorama: The Six Billion Dollar Man, 11 May 2009, BBC One at 8.30pm.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/panorama/hi/front_page/newsid_8025000/8025119.stm
"

Sorry. ;)

Henk Elegeert

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