Romney Camp Dismissive of Ponzi Accusations

Nov 1, 2011 3:22pm

The Romney campaign today denied a published report that alleges the presidential candidate and his eldest son have business connections to three individuals who were once accused of being involved in an $8.5 billion Ponzi scheme.

The report by the liberal blog Think Progress claims that Tagg Romney helped create a financial firm named Solamere Advisors with three executives from the Stanford Financial Group, a company that was seized by the U.S. government in 2009 after the Securities and Exchange Commission accused it of being “a massive Ponzi scheme.”

Tagg Romney told Think Progress that his partners — Tim Bambauer, Deems May, and Brandon Phillips — have been cleared of charges.

 Think Progress, however, claims that those charges are still being adjudicated.

Solamere Advisors, according to the piece, is a subsidiary of Solamere Capital, which was founded by Tagg Romney and was invested in by his father as well as the Romney campaign’s National Fundraising Chair Spencer Zwick, who now serves as a managing partner at the firm.

A Romney campaign spokeswoman was dismissive of the article.

“It’s not surprising that a left-wing blog with a highly partisan agenda would publish false material as it relates to Mitt Romney. Mitt Romney has no ties to the Stanford Financial Group or any of its activities,” said campaign spokeswoman Andrea Saul.

Tagg Romney spoke to Think Progress earlier this month in Las Vegas and said that he had been aware of the accusations against his partners.

“Before we invested in them, they were in that. But they were cleared of that before we made our investment,” Tagg Romney said.

Tagg was also asked about any profits his business partners may have made in the scheme, to which he told ThinkProgress: “They probably made, their pay there was like $15,000 total. Those guys got totally screwed by the whole thing. It almost ended their whole careers because they moved all their clients over [to the Stanford Financial Group], and then the place was shut down two months after they moved their clients over. They hadn’t made any money yet. They had bonuses and everything promised to them, but they didn’t make any of their money. So they made no money.”

But according to Think Progress, Tagg Romney’s account isn’t entirely accurate: “According to documents reviewed by ThinkProgess using the Pacer search engine, charges against Tim Bambauer, Deems May, and Brandon Phillips have not been dropped. A recent court filing shows May requesting the court for arbitration instead of going to trial. ThinkProgress also spoke to the deputy clerk for the federal District Court in Dallas, and confirmed that the three men are still defendants in the lawsuit to recover the Ponzi scheme money.”

ThinkProgress also alleges, citing a court-appointed audit of the Stanford Financial Group, that the three partners also profited far more than Tagg Romney suggested

Solamere Capital issued the following statement later today:

“It is inaccurate to suggest that Solamere Capital made an investment in this firm. Solamere Capital was approached to invest in a new wealth management firm being launched by these three individuals.  After extensive due diligence, Solamere Capital decided not to invest because the business was at an early stage and did not meet our investment criteria. 

“However, Spencer Zwick, Tagg Romney and Eric Scheuermann each own a minority stake in the business as individual investors.” 

 

 

 

SHOWS:
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus