Allen Stanford : Another Bernard Madoff?

February 19, 2009

One year politicians are happy to take a businessman’s money and the next year they pretend to not even know the person. So it is with Sir Allen Stanford who just may be he next Bernard Madoff. The Democratic convention in Denver last year gives us pictures of Nancy Pelosi and Bill Clinton hugging and enjoying the friendship (and $150,000) from Stanford. That was then. This is now.

But Stanford may have a more sordid background than Madoff.

The SEC’s fraud charges may be the least of accused financial scammer R. Allen Stanford’s worries. Federal authorities tell ABC News that the FBI and others have been investigating whether Stanford was involved in laundering drug money for Mexico’s notorious Gulf Cartel. Now we’re talking serious stuff.

Down South, panicky depositors were turned away from Stanford International Bank and some of its Latin American affiliates Wednesday, unable to withdraw their money after U.S. regulators accused Texas financier R. Allen Stanford of perpetrating an $8 billion fraud against his companies’ investors.

But a mother or father never believe bad stuff about their kids!

The father of R. Allen Stanford, the Texas billionaire named along with some of his companies in a massive civil fraud complaint, said today he doesn’t believe the allegations, but that his son hinted something might be amiss when they last spoke a week or so ago. “He just told me to watch the papers, the Wall Street Journal and all that,” said James Stanford, 81, in an interview at his office in this central Texas town. “He said something, stuff that had been rumored, but nothing like this.”

Meanwhile, in Antigua, where SIB is based, the authorities attempted to calm locals who lined up at the Bank of Antigua in St John’s to demand their money. Bank of Antigua is part of Sir Allen’s financial empire on the island but it does not figure in the SEC’s complaint. The Eastern Caribbean Central Bank, the monetary authority for eight islands including Antigua, said it had sufficient reserves to deal with any fallout and assured depositors their money was safe.

Who’s going to bail out Antigua?