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A tangled web of fraud unravels

On Behalf of | Aug 16, 2013 | Firm News, White Collar Crimes |

In a story that gives credence to the old saw, “What a tangled web we weave when we first practice to deceive,” executives were caught up in a white collar crime that became far-reaching.

Three executives who worked for convicted Ponzi-schemer R. Allen Stanford were ordered by an administrative judge recently to pay millions of dollars in penalties and disgorge any and all personal gains.

The now so-called Stanford $7 billion Ponzi scheme reportedly has significant connections to Baton Rouge and Louisiana. Indeed, a Baton Rouge office signed off on many of the investments by unwary buyers. A New Orleans law firm was also charged in a lawsuit last year of aiding and abetting the scheme.

The scheme in question was classic: Stanford Group Company was a broker-dealer that sold certificates of deposits from Stanford’s offshore bank in Antigua, called Stanford International Bank. Various executives found themselves in the business of approving and distribution of brochures and disclosure statements that had misleading information about the bank’s less than sterling portfolio.

The information about the portfolio was clearly false, concluded regulators. Although the executives denied any detailed knowledge of the true content of Sanford’s portfolio, fact-finders did conclude that the men did know that folks were questioning the assets behind Stanford’s bank and helped spread false information to the hapless investors.

The administrative court also concluded that the executives were very much cognizant that clients and potential clients had voiced their chagrin about corruption and the bank having a precarious business model. But instead of investigating, they designed a response hallmarked by talking points rather than any exhaustive internal audits.

One group of relatives lost a total of almost $1.8 million in the scheme, the investigators revealed.

How far the ball will continue to roll is anyone’s guess. However, one thing is certain, anyone with a hand in the scheme needs to seek and find an attorney with honed skills in defending white collar crime.


Time Picayune, “Stanford executives ordered to pay back ‘ill-gotten gains’ in fraud case” Diana Samuels, Aug. 08, 2013