What happened
The FBI located Texas billionaire R. Allen Stanford in Virginia Thursday and served him papers related to his alleged $8 billion international financial fraud. Venezuela seized the local subsidiary of Stanford’s Antigua-based bank. Earlier this week, the Securities and Exchange Commission charged Stanford with defrauding thousands of investors by promising improbably high and steady returns. (AP in Yahoo! Finance)
What the commentators said
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If it weren’t for Bernard Madoff’s $50 billion Ponzi scheme, said USA Today in an editorial, Stanford’s alleged $8 billion fraud would be a much bigger story. But it also may not have been a story at all, since it took the “shocking Madoff scandal” to “light a fire” under the lax SEC. Investors need to learn to avoid too-good-to-be-true deals, but the SEC needs to watch out for those “red flags,” too.
The SEC is getting better, opening six investment-fraud cases last month alone, said David Weidner in MarketWatch. In fact, the competition to become a famous fraudster is so fierce now, you almost have to feel bad for Stanford. Madoff’s "star-studded client list,” Holocaust-charity bilking, and Russian mobsters make Stanford’s scam look “pedestrian by comparison.”
Stanford’s fraud may be a “story for the financial pages” in the U.S., said Britain’s The Guardian in an editorial. But it’s a “sports-page story” in Britain, due to his flamboyant and fraudulent sponsorship of cricket. And in the “tax haven island of Antigua,” where he’s a major employer, event sponsor, and a knight, it’s front-page news, “akin to a financial hurricane.”
So with dual Antiguan and U.S. passports, billions in wealth, and his own jets, he’s caught “holed up in Virginia”? said Ann Woolner in Bloomberg. “What’s with that?” Fellow fraud fugitives like Marc Rich and Robert Vesco lived large in Switzerland and Latin America, respectively, and Stanford doesn’t even have a warrant out for his arrest—yet. Now his moment’s passed, and he’ll have to face the music.
