Convicted Ponzi schemer R. Allen Stanford was sentenced last week to 110 years in federal prison for his $7 billion fraud.
From his base in Antigua Stanford victimised thousands of individual investors to fund a lifestyle of private jets and Caribbean vacation homes. He invested heavily in cricket to try to attract new investors. Like other cricket playing nations in the region, the Cayman Islands was a grateful recipient of his misappropriated generosity until his downfall.
Now the question is whether there will be anything left at all for these victims once authorities in jurisdictions around the world finish sifting through the wreckage.
“Stanford stole more than millions. He stole our lives as we knew them,” said victim Angela Shaw. Certificates of deposit issued by a Stanford bank in Antigua promised sky-high returns but succeeded only in destroying the savings of mostly middle-class retirees. More than three years after US law enforcement shut down the Stanford outfit, victims have recovered nothing.
A receiver appointed by a federal court has collected $220 million from the remains of Stanford’s businesses but has already used up close to $60 million in fees for himself and other lawyers, accountants and professionals, plus another $52 million to wind down the Stanford operation.
And then there’s the Securities and Exchange Commission, which didn’t charge Stanford for years even after its own examiners raised red flags as early as the 1990s. The SEC has lately pursued a bizarre attempt at blame-shifting, trying to get the Securities Investor Protection Corporation to cover investor losses. SEC enforcers should instead focus on catching the next Allen Stanford. Careful investors should expect that they won’t.