Ponzi Schemer Allen Stanford Raked It in Thanks to Lax Florida Regulations

Categories: News
Way back in April, New Times reported on how Sir Allen Stanford built a $7 billion Ponzi scheme in the Caribbean thanks to blind regulators and political influence.

Thumbnail image for AllenStanford.jpg
via Liz Lomax 3D Illustrations for the Texas Monthly
Yesterday, the Miami Herald fleshed out the local incompetance and greed that helped Stanford rake in more than $600 million from a plush downtown Miami office -- apparently without reporting any of the investments to state regulators.

If you haven't read the Herald piece, here are some highlights:

  • In 1998, Florida's chief banking lawyer tried to prevent Stanford from opening a branch office in Miami, telling state officials he feared Stanford was laundering money at his Antigua headquarters.
  • Florida's banking regulators ignored their lawyer's advice.
  • Stanford was allowed to not only open a Miami office, but also move investors' money from Florida to Antigua with no reporting or oversight.
There's one question the Herald story doesn't touch: How did Stanford persuade state regulators to accept an unprecedented sweetheart arrangement like that? We reported Stanford passed out millions in donations and lobbying fees in Washington as he built his Ponzi scheme -- and that our own Bill Nelson was the biggest single recipient.

The Herald notes powerhouse lawyers from Greenberg Traurig repped Stanford. Based on how he operated in Washington, it's a safe bet his Florida deal wasn't based on powerhouse lawyering alone.

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