Stanford Cleanup May Be More Complex Than Madoff

Stanford Cleanup May Be More Complex Than Madoff - 4/6/2009

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Stanford Cleanup May Be More Complex Than Madoff
John Pacenti

Daily Business Review. April 6, 2009
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EXCERPT: When R. Allen Stanford's financial empire collapsed, the reverberations spread throughout the world. There is now a receiver in just about every country where the fifth-generation Texan operated, and all are assigned to track down what's left of Houston-based Stanford Financial Group and its related enterprises. "This thing has gotten so many hydra-like heads," said Bowman Brown, an international banking attorney with Shutts & Bowen in Miami who represents Stanford clients. "They are from all over the place. There are a number in Latin America, including Venezuela, the Dominican Republic, San Salvador, you name it." Receivers are at work in Panama, Mexico, Colombia and of course, the United States, as well as Stanford's second home, the Caribbean island nation of Antigua and Barbuda, Brown said. His firm has been contacted by as many as 100 Stanford customers for representation. While much focus has been placed on the millionaire victims of Bernard Madoff's $50 billion Ponzi scheme, Brown said the people in Latin America who dealt with Stanford were far from rich. "It's really heart-rending," Brown said. "There are so many people who for whatever reason put everything they had into this. They worked all their lives to develop successful businesses, sold the businesses when they were ready to retire and put all that money into Stanford. Now they have zero, and they don't have jobs." He said filing lawsuits against Stanford companies right now would be a waste of time since they are in receivership. "It's futile. It's like suing yourself," Brown said. Madoff, who pleaded guilty to operating a multibillion-dollar Ponzi scheme, operated mainly under one business umbrella. Stanford, in contrast, set up companies in multiple jurisdictions and operated with minimal oversight by U.S. regulators. Another difference from Madoff is that Stanford has not been charged criminally so far.

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