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

quote:

---

there was an office in River Ranch in Lafayette

---

I'll be damn, didn't know that. Looks like he was following the oil pipeline money from H-Town to Laffy. And then where there's oil money then there's medical/doctor money. Wow, thanks for sharing.

know some people in Zachary that lost a lot.

I worked for a firm that represented the Louisiana investors in the suit against Stanford group.

I was just a runner but saw some interesting things when we got discovery in. This was in 2010/2011 and I’m fairly certain I was watching the fraud occur via pdf emails I had to code and save.

A vast majority of them were from managers to back office people asking for them to revise accounts to reflect changes in purchase dates and interest rates. As a junior finance major I remember thinking “uhhh pretty sure they can’t do that”

ETA: i had seen the list of people represented and how much they lost and just remember knowing several people on there and being shocked at how much was gone.

quote:

---

Stanford back in the news today

---

what news?

quote:

---

Today is the 15-year anniversary of when he was arrested and charged.

---

I just so happened to be eating lunch across the street when it went down. I walked out and was like WTF?

quote:

---

Do any of you Louisiana baws remember this and can share stories?

---

I'm not sure if this is the kind of "stories" you're referring to but back in that time period prior to the fraud being discovered at Stanford I worked at a bank in the trust department in Baton Rouge.

I had a older couple come to me wanting to take all of their money out of their trust accounts at our bank in order to buy CDs issued through Stanford's offshore bank.

They kept telling me the CDs were "insured" and there was no risk. As best as I can recall market interest rates on CDs back then were in the 6-9% range and Stanford was going to pay 12-15% on the CDs the couple planned to get.

As much as I tried to reason with them I couldn't talk the couple out of getting the Stanford CDs.

I didn't know where the fraud was but I knew without a doubt that couple was going to lose their money.

And they did.

quote:

---

They kept telling me the CDs were "insured" and there was no risk. As best as I can recall market interest rates on CDs back then were in the 6-9% range and Stanford was going to pay 12-15% on the CDs the couple planned to get.

---

I believe back then the FDIC limit was only $100k for legitimate CD's in a state or nationally chartered US bank, so I guess Stanford played off of that by giving the illusion that his bank in Antigua would have the equivalent of FDIC but at much higher US dollar limits to assure his investors to cough up over 80% of their liquid assets.

It was a pretty big deal here in Tupelo. The Feds raided the Tupelo office at the same time as the Houston main office.

Tupelo

Chief Financial Officer James Davis and Chief Investment Officer Laura Pendergest-Holt were charged by the Securities and Exchange Commission of bilking investors out of more than $7 billion in high-yield certificates of deposit.

Both Davis and Pendergest-Holt had offices in SFG’s Tupelo office. Davis, who was Stanford’s college roommate, is a fifth-generation north Mississippian with family ties to the Baldwyn area; Pendergest-Holt is a native of Baldwyn.


• February 2011 – Stanford Financial’s former Tupelo office building in Fairpark is auctioned off.

• April 2011 – Southern Motion buys the former Forefront Golf facility in Baldywn that Davis opened.

• August 2011 – Baldwyn businessman Earl Stone buys seven downtown buildings that once belonged to Davis.

• December 2011 – Trustmark National Bank’s main Tupelo office opens in the former Stanford building.

• January 2012 – Trial begins for Davis. He is the prosecutor’s key witness in 2012 trials against Stanford and two ex-financial executives, and was credited with pressuring a guilty plea from Pendergest-Holt.

• March 2012 – Stanford convicted of 13 counts of fraud and sentenced to 110 years of prison.

• May 2012 – Pendergest-Holt indicted on one count of conspiring to obstruct a Securities and Exchange Commission investigation into SFG and a second count of obstructing the investigation.

• June 2012 – Pendergest-Holt pleads guilty to one count and faces up to five years in prison.

• September 2012 – Pendergest-Holt is sentenced to three years in federal prison. She admitted she lied to the SEC hearing about Stanford investments and the integrity of its products.

• January 2013 – Davis is sentenced to five years in federal prison.

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.