Mini Madoff Ripped Off by Real Madoff
Allen Stanford, the Texas billionaire charged yesterday in an $8 billion fraud by the SEC, apparently lied to his clients about all kinds of things. Including not losing any money to Bernie Madoff.
In December, Stanford's company, Stanford Financial, announced that it had no exposure to Bernie Madoff's $50 billion Ponzi scheme. In fact, Stanford's lieutenants told him it had lost around $600,000 in the Madoff scheme.
Unlike Madoff (left), who turned himself in before the financial cops cottoned to his scheme, Stanford got caught. He tried to flee the country to Antigua, where his Houston-based company has substantial operations — but his credit card got declined at the private-jet counter. He remains at large, with the SEC unaware of his whereabouts — looking like a petty thief fleeing the scene of his crime. Madoff, meanwhile, resides in the leisure of his Park Avenue apartment, with investigators hoping to use him to unravel the mysteries of his operation.
Which just goes to show how second-rate Stanford is as a financial schemer. He's no Madoff, that's for sure! His was not a true Ponzi operation. According to the SEC charges, Stanford merely deceived investors about the kind of investments he was putting their money in, and promised them unreasonably high rates of return at unbelievably low stated risk — "marketing a hedge fund as a CD," as Business Insider put it.
Where was CNBC on all this? The business network lionized Stanford for his billions, some of which he invested in British sports leagues: