About Where's the Money?
Allen Stanford, a fifth-generation Texan from Mexia (also Anna Nicole Smith's hometown!), started Guardian International Bank on Montserrat in 1985, and it was a Ponzi scheme from day one. Jim Davis, his college roommate from Baylor, joined the fraud a few years later.
After being told to leave Montserrat, which was getting a nasty reputation for crooked banks, Stanford relocated to Antigua and found a welcoming (read: corrupt) environment. For two decades, while Davis nervously cooked the books, Stanford poured investor money into vanity projects on the grateful island: two airlines, a cricket stadium, a hospital, two restaurants, a newspaper, a health club, and the development company that built them all.
Meanwhile, happy investors in the U.S., Mexico, Venezuela and around the world were getting account statements showing the growth of their nest eggs.
Which works as long as markets go up.
Then along came 2008. The worldwide recession brought customers looking for cash. And then two final straws on the camel's heavily- weighted back: an insider went to the FBI, and an outside financial analyst published a scathing article in Venezuela that went viral. A few days later, the Feds descended on the fake empire, and that was that.
At over $7 billion, it was the second largest financial scam in U.S. history, after only Bernie Madoff.
Unlike the Madoff scheme, which was reserved for the very rich, Stanford targeted both upper and middle class customers. Many, many people, especially in the U.S., lost their entire life savings. There have been dozens of suicides, although the exact number is impossible to calculate.
On average, victims have gotten back one cent for each dollar invested.
Dave Henry has been a producer, director, cinematographer and editor for over 25 years in Houston. Among his many corporate clients was Stanford Financial Group. Enough said.
"Saying that an island in the eastern Caribbean is corrupt is like saying I’ve got an Aunt Millie... but if there’s a standard for it, it’s Antigua."
Bob Hoffman, former Stanford employee