R. Allen Stanford might have been born American, but his behaviour hails directly from the British school of colourful rogues. Consider the evidence, says The Daily Telegraph: the blagged knighthood; the hunting scenes and vintage books in his banks; the Antiguan restaurant he cheekily named The Sticky Wicket; the groping of the English Wags. It's pure Wodehouse.
In an interview with Forbes last year, Stanford offered his advice on how to spot a liar. That's pretty rich, since the urge to deceive seemed to extend to everything he did, says The Observer. Even the helicopter, bearing his name and crest, in which he touched down at Lord's last summer, was hired for the day and the logos were stuck on with paste. Stanford claimed false family links with the founder of Stanford University, exaggerated his royal connections, and purported to be a "world-renowned former cricketer".
But he also donated millions to American politicians (including Barack Obama and John McCain) and schmoozed his way through the ranks of sporting celebrity. When rich men "start throwing money around as soon as they get within a few yards of professional athletes", watch out, says The Daily Telegraph. A far more glaring red flag, says The Sun, was the murkiness of Stanford's Caribbean operation. He was probed five times in 20 years by the FBI and Scotland Yard, in connection with alleged links with Colombian and Mexican drug cartels. In 1997, his bank handed back $3m in drugs cash to the American authorities. From the safety of his fiefdom in Antigua Stanford batted off several law-suits, a claim for £400,000 in unpaid US taxes, and allegations of bribing politicians.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
A father of six by different mothers, his whole lifestyle was geared towards the convenient flit, says The Sunday Times. He built a colonial-style mansion on Antigua, but spent most of his time on his yacht, attended by his personal chef, housekeeper and girlfriend. "It was the ideal set-up for a billionaire...who wanted to travel untroubled by formalities."
Stanford certainly couldn't wait to get out of the small Texan town of Mexia where his father ran an insurance and property business founded by his grandfather during the Great Depression. "He was entrepreneurial from the start, what we could call a 'Boss Hog'," notes his father. His big break came in 1983 when the Texas oil bubble burst. Stanford snapped up dozens of properties in Houston, which he later flipped for millions, using the proceeds to set up the offshore Guardian International Bank on Montserrat in 1985. Six years later, the island revoked his banking licence (another warning sign missed) and the bank relocated to Antigua. Specialising in "high returns and secrecy", the Stanford International Bank grew to encompass branches in America, Latin America and Europe and, until last week, was reputedly sitting on $8bn in assets.
The full facts of what happened to the cash beyond financing an extravagant lifestyle have yet to emerge, says The Guardian. But if the US Feds make a criminal case stick, "Stanford's next living quarters could be somewhat less lavish".
How Stanford dodged the law for 15 years
They're already calling him "Mini-Madoff", says Newsweek, and ironically it was Allen Stanford's decision to invest with Madoff that helped secure his downfall. Not only did Stanford Financial lose heavily when Madoff collapsed, but an American firm that processed the bank's money transfers grew worried and stopped acting. "Investors began to withdraw money. Stanford's firms began shifting tens of millions of dollars out of the US. The SEC finally acted," says The Sunday Times.
Not before time, says The Guardian. Accusations of wrong-doing date back at least 15 years. Indeed, those taking the trouble to drill beyond the glitz simply could not believe "the outlandish rates of return" ostensibly made on low-risk 'certificates of deposit'. In 1995 and 1996, Stanford reported identical annual returns on its investment portfolio of 15.71%. Ten years later, two former employees sued, alleging they'd been forced out for refusing to participate in illegal activities.
The bank's glaring governance holes are almost laughable, says the Canadian Globe & Mail. Stanford was the sole shareholder, and the firm's other directors consisted of a college pal, his 81-year-old father, and an 85-year-old former car dealer from Mexia. The tiny Antiguan firm responsible for auditing Stanford's sprawling empire, meanwhile, was run by a septuagenarian who died last summer.
In Houston, where the group's headquarters is based, "Stanford Financial was like a phantom company", says one local financier. "You never saw anyone...it was like they weren't even there." Thousands of stung investors must now be wishing that had, indeed, been the case.
-
Zoopla: UK property supply hits eight-year high ahead of general electionNews More homeowners are putting their properties up for sale but many are relisting after failing to find a buyer last year - is now a good time to buy?
-
What’s happening to the NatWest share sell-off? Impact of general election 2024 explainedThe UK government has held shares in NatWest Group since the 2008 Financial Crisis. But a plan to sell off a large chunk of them appears to have been delayed.
