Last year, the global credit crisis exposed one of the greatest financial fraudster in the history of mankind in (former) Wall Street heavyweight Bernard Madoff. Accused of running a scam that cost his investors US$50 billion, the man is now under house arrest pending trial.
However any notion that Madoff is a one-off incident is now dead in the water because U.S financier R. Allen Stanford is now accused of committing an US$8 billion fraud. Although it pale in comparison to Madoff’s US$50 billion scam, US$8 billion is still a lot of money. Stanford is accused of committing the fraud by lured investors with promises of improbable and unsubstantiated high returns on certificates of deposit. With the stock market wipe-out, it is believed that most of these “certificates of deposit” are now close to worthless.
Like Madoff, Stanford is a very well-known personality. At 58, he has a personal fortune estimated at $2.2 billion and is known to bankroll public works and cricket tournaments. He is a major donator in U.S. politics, owns homes and operates his businesses everywhere from the U.S to Europe. He even has a knighthood in Antigua in recognition of his charity work.
And just like Madoff, Stanford’s victims include some pretty well known names; Vijay Singh and Micheal Owen are among the victims this time as people rushed to withdraw their money from Stanford International Bank and its affiliates in a half-dozen other countries. With another multi-billion fraud coming just 2 months after the Madoff, I have to wonder what the hell the U.S Securities and Exchange Commission (SEC) is doing. How can they miss TWO multi-billion fraud case?
If this is the standard in the U.S, I wonder about the future. With the Dow at a 6 year low, I wonder just how many more scams and how many more billions of dollars are lost now due to these fraudsters.