Another one bites the dust (Stanford Int'l Bank)

[Judge Roy Bean]

OUCH!

http://www.bizjournals.com/sanjose/stor ... ily27.html

Robert Allen Stanford and three of his companies are being accused by the Securities and Exchange Commission of perpetuating an $8 billion fraud.

“We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world,” said Rose Romero, regional director of the SEC's Fort Worth, Texas, office, in a press release.

[SteveSy]

This is very bad and has hit very close to home. I have a very close friend that has about 4 million invested with these guys and he can't get anything out nor can he get any answers as to when.

[Demosthenes]

The political angle on this story is going to get very very interesting. The USVI scheme is one of the tax shelter programs I got shut down in 2004.

Excerpt from today's WSJ:

Tax-Rule Lobbying

For the past few years, Mr. Stanford, who moved to St. Croix in the U.S. Virgin Islands, has been lobbying to preserve and expand tax rules that enable him to pay minimal federal income taxes as a resident there, according to lobbyists. While allies of Mr. Stanford in Congress have managed to fend off attacks on rules, his efforts to expand them further have thus far been unsuccessful, lobbyists said.

Among the recipients of Mr. Stanford's largesse is House Ways and Means Committee Chairman Charles Rangel (D., N.Y.), who has long advocated lenient tax policies toward Virgin Islands residents and in 2007 introduced a bill to enforce a statute of limitations on IRS scrutiny of islanders' old tax returns. That year, Mr. Rangel traveled to Antigua for a development conference partly sponsored by Mr. Stanford, who also donated $28,300 to Mr. Rangel in 2008.

"I met Stanford a couple of times," Mr. Rangel said. "He has never discussed any legislative issue with me nor has anyone to my knowledge representing him ever discussed any legislation."

From Talking Points Memo:

Last May, buried in a long Bloomberg report about Stanford's tussles with Stanford University over his claim to be descended from the school's founder, was this nugget:
Members of the House Caribbean Caucus take annual trips to the region on Stanford's jets. Lawmakers are required to reimburse companies at a first-class commercial rate, which is often a fraction of the actual cost.

The House Caribbean Caucus? We don't mind telling you, we weren't even aware of its existence.

But according to this announcement from the Inter-American Economic Council, which appears to be from circa 2005, it has some pretty interesting co-chairs:

Co-Chairs of the Congressional Caribbean Caucus Congressman Donald Payne (D-NJ), Congressman Robert Ney (R-OH), Congressman Pete Sessions (R-TX), Congressman Tom Feeney (R-FL), Congressman Charlie Rangel (D-NY), Congressman John Sweeney (R-NY), Congressman Mel Watt (D-NC), Congressman Phil English (R-PA), Congressman Steve Chabot (R-OH) Congresswomen Donna Christensen (D-VI), and Congresswoman Diane Watson (D-CA).

[Judge Roy Bean]

This is very bad and has hit very close to home. I have a very close friend that has about 4 million invested with these guys and he can't get anything out nor can he get any answers as to when.

Steve, I hate to point out the obvious, but there probably isn't much left to "get."

[Burzmali]

Co-Chairs of the Congressional Caribbean Caucus Congressman Donald Payne (D-NJ), Congressman Robert Ney (R-OH), Congressman Pete Sessions (R-TX), Congressman Tom Feeney (R-FL), Congressman Charlie Rangel (D-NY), Congressman John Sweeney (R-NY), Congressman Mel Watt (D-NC), Congressman Phil English (R-PA), Congressman Steve Chabot (R-OH) Congresswomen Donna Christensen (D-VI), and Congresswoman Diane Watson (D-CA).

[/quote]
For some reason, the thought of these illustrious members of Congress chillin' out and enjoyin' a fat spliff while listenin' to some Bob Marley is remarkably funny to me.

[SteveSy]

This is very bad and has hit very close to home. I have a very close friend that has about 4 million invested with these guys and he can't get anything out nor can he get any answers as to when.

Steve, I hate to point out the obvious, but there probably isn't much left to "get."

Man, I certainly hope that's not the case. It's nearly everything he has. the stuff looked very legitimate, and gave the impression it was backed by the federal government. The return rate was a little high but not so much so that it was an obvious fraud. He was getting 6.85 on his CD's, that's not outrageous but certainly higher than the norm. I sat down in several meetings a few years back with him and Stanford because I was looking to invest. I ended up losing my money in the Dot Com nonsense. I envied my friend for making the right decision. These guys just looked like really good investors. None of it was supposed to be in real estate based CDO's or any form of derivatives. It seems that wasn't exactly the case.

[Demosthenes]

If I'd known you were looking at Stanford, I'd have warned you off years ago. The only thing surprising about this latest scheme is how long the SEC took to act. Stanford should have been shut down in the mid to late 1990s.

[SteveSy]

And I would have warned you off the dot com stuff, or at least limited your exposure.

Unfortunately I wouldn't have listened anyway...watched a few of my friends start up web portals and then sell them making their retirement over night. I didn't invest in web stuff I fell for DSL (NorthPoint being the one I was most exposed in), which still to my amazement collapsed even though it was and still is very popular.

On a side not Bud as you know it is no more it was recently taken over by a Brazilian owned firm. They're slicing and dicing that company up, and cutting extremely deep in to the operations, so I would beware...

Anyway...Like I said I hope Stanford has at least some of the money. From what I can tell so far no one is saying he just ripped these people off. The SEC is saying he misrepresented his product. The money was dumped in non-liquid assets which was contrary to what he told his customers but it was still invested.

[wserra]

Over the years I have bought and sold BUD and K on a number of occasions

No wonder you post under a pseudonym.

[Mr. Mephistopheles]

Over the years I have bought and sold BUD and K on a number of occasions

No wonder you post under a pseudonym.

All this time he thought the area high school art students were there to study his art collection. Little did he know they were just there for the brownies and Doritos.