Stanford Update: Show Me the Ponzi

By Justin Rood

Apr 13, 2009 9:10am

If billionaire Allen Stanford was really running a Ponzi scheme out of his Antigua-based financial empire, why are the Feds finding so much money? "Baloney. Baloney!" That’s how Stanford responded when Brian asked him if he had been running a Ponzi scheme, during their impromptu sidewalk interview that aired last week. "It’s not a Ponzi scheme," said Allen, whom the goverrnment accuses of running a Ponzi scheme. "If it was a Ponzi scheme, why are they finding billions and billions of dollars all over the place?" Grant this much to "Sir" Allen: he can count.  Sure enough, the court-appointed receiver overseeing Stanford’s former financial empire has acknowledged locating at least $6.3 billion in Stanford’s assets. About $4.6 billion has been unfrozen and made available to Stanford’s depositors; $1.7 billion is still frozen, despite a court battle by its alleged claimants. That’s from a total of $8 billion in assets the SEC said Stanford reported as of late 2008, and investigators are still tracking down more. So why, I wondered, had the FBI found only $250 million as of late February, as it testified in court? And how could the government call Stanford’s activities a Ponzi scheme, if so much money was being returned? Good luck finding out. The receiver, Ralph Janvey, didn’t respond to numerous phone calls over several days. The SEC deferred to Janvey. FBI Washington headquarters directed me to the bureau’s Houston office; a spokeswoman at the Houston office said she didn’t know if they were commenting publicly.  The Justice Department similarly declined to comment. “I know the receiver is keeping everything pretty close to the vest,” said Dick DeGuerin, Stanford’s lawyer, who perhaps unsurprisingly agrees with his client’s assessment of the situation. The FBI didn’t find Stanford Financial’s billions "because they didn’t know where to look," DeGuerin said. “We’re going to be asking for an accounting of what they tracked down, what they sold and why they sold it,” possibly as early as this week, said DeGuerin. "In the end," said the attorney, "it’s going to show there wasn’t any fraud, there wasn’t any Ponzi scheme."

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