Pop Culture
Apr 29, 2009, 10:17AM

Sir Allen Stanford's alleged Ponzi scheme

At  $8 billion it's hardly the biggest or most shocking of scams in recent months, but Stanford sets himself apart for his "wretched excess and jaw-dropping gumption."

EVERY SCAM IS IDENTICAL EXCEPT FOR THE DETAILS. That’s what I told myself around lunchtime on February 17, as I rushed to the offices of the Stanford Financial Group after hearing that federal marshals had just staged a raid. Like a lot of people in Houston that day, I’d learned most of what I knew about Robert Allen Stanford in the previous week or so: He was, at 59, a simultaneously flamboyant and secretive Texas billionaire and the owner, founder, and lone shareholder of a global network of financial service companies valued at $50 billion—an empire that stretched from Houston to Miami, Zurich to Mexico, South America to the Caribbean, and beyond. He now stood accused by the Securities and Exchange Commission of masterminding an $8 billion fraud, which was subsequently upgraded to “massive Ponzi scheme.”The afternoon was cool and rainy, reminding me of grim, chilly December 2001, when Enron collapsed and so many employees were using their pricey Aeron chairs as dollies to carry out their belongings. I thought, momentarily, that Stanford’s fall was going to be déjà vu all over again. Here were the TV cameras, the bewildered shareholders, the shell-shocked workers, the stories of life savings vanishing into thin air—or into some rogue’s very deep pockets. But instead of two gleaming downtown office towers, there was an innocuous brick-and-limestone building sitting on the coveted 5000 block of Westheimer. Instead of folksy Ken Lay and evil genius Jeff Skilling, we had a megalomaniac from Mexia who went by the title “Sir,” even though he hadn’t been knighted by the queen of England but by some government official in the Caribbean.
When I reached my destination, I was reminded less of Enron than of those grainy, sped-up films I’d seen of bank runs during the Great Depression. I fell into line behind something resembling a Drive-through of Doom: People were easing their (mostly nice) cars up to the front of the building or sliding around the corner, leaving their flashers on, and racing to the entrance only to find a sign directing them to a Web site, stanfordfinancialreceivership.com, where they would learn the whereabouts of the college funds, trust funds, and inheritances they had invested with Stanford. Anyone who pounded on the glass doors got helpless shrugs from the uniformed guards inside. The words literally set in stone beside the door offered small comfort: “These companies are dedicated to the glory of God.”


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