Can Better Financial Regulation Prevent Investors from Being Defrauded?
- New Horizons in Money and Finance series
Chapter 5: Allen Stanford: the cricketing impresario
Can one envisage a tall (6ft 4in), broad and affable Texan billionaire who was also a cricket entrepreneur with a knighthood? An unlikely combination, one might think, but it did exist – in the person of Sir Allen Stanford. Nevertheless, there was an air of unreality about Stanford. While born a Texan, he was a billionaire only as a result of fraud. His only real interest in cricket, a sport originally alien to him, was as a means to promote his fraud. And his knighthood, while real, was withdrawn as a result of his crimes. So who was Allen Stanford, and what were his crimes? He was the creator of a huge Ponzi scheme, rivalling Madoff’s in its audacity and length of operation, which for a time funded an extravagant lifestyle and enabled him to play the part of philanthropist-at-large, with particular interests in the West Indies and sporting events such as international 20:20 cricket competitions. All of this came to an abrupt end when authorities finally caught up with him in 2009. Box 5.1 chronicles the saga. In the end, Stanford was jailed for 110 years in June 2012 in a US Federal District Court in Houston, Texas, for perpetrating a Ponzi fraud amounting to at least $7 billion, involving more than 20 000 victims. A jury in March 2012 had found him guilty of 13 out of 14 charges involving mail and wire fraud, conspiracy, money laundering and obstruction of justice.
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