re: Allen Stanford's Ponzi back in the news (Baton Rouge question)

He had a location in Baton Rouge.
They were licensed security dealer and also pushed the offshore CD’s.

The CD’s were paying well over the rate anyone could get with an insured rate. In early 2000’s when insured bank CD’s were paying 1-2%, Stanford bank CD’s were paying over 5%. That alone should raise red flags but it goes to show the naïveté of people.

The genius of his strategy was that he was using brokers to sell these as safe alternatives to stocks but with decent “safe” returns. The brokers could use the CD’s to lure investors in with these “safe” investments that no one else could get plus the ability to invest in stock market investments if they wanted. It fed right into those that considered themselves conservative investors many of which were retirees. These investors thought they had found the secret to good returns through safe investment vehicles. It played on naïveté and greed. Savvy investors should have questioned the CD’s high yield. Naive investors just figured it to be smart and safe.

I know other brokers that were highly suspicious of the claims at the time. They couldn’t offer anything like this to their investors yet somehow Stanford was able to give investors CD’s at incredible rates! Something had to be amiss. But investors took the bait anyway.

Stanford is a dirtbag. He set out to be a fraud unlike others who fell into it because they got behind in their returns and couldn’t face it. This guy set out from day 1 to defraud people, and use their money to live a lavish lifestyle.