By Dennis Seid/NEMS Daily Journal
For many, if not most, of the people who were defrauded by Stanford Financial Group, a 110-year sentence and forfeiture of $5.9 billion for the company’s former jet-setting, playboy CEO isn’t nearly enough.
R. Allen Stanford was slapped with that sentence Thursday for stealing $7 billion in an elaborate Ponzi scheme. Some 21,000 investors, including hundreds of Mississippians, were victims, many of whom lost their entire savings.
Some lost thousands of dollars, others lost hundreds of thousands.
And the likelihood of the victims recovering anything anytime soon is debatable. With attorneys in the U.S. and Antigua fighting over who gets what and how much, the victims are left on the sidelines.
Whatever money is left will be only a fraction of what they invested.
The jury that convicted Stanford cleared the way for authorities to pursue $330 million in stolen investor funds in his frozen accounts in Canada, England and Switzerland. Even if the lawyers didn’t get a single cent, that averages to less than $16,000 per victim.
So how stiff is Stanford’s sentence?
In 2009, Bernie Madoff, charged with orchestrating the largest Ponzi scheme ever and bilking $65 billion from investors, was sentenced to 150 years and forfeiture of more than $17 billion in ill-gotten gains.
Stanford, 62, won’t be around to fill his sentence. Neither will Madoff, now 74.
But again, that doesn’t bring much solace to many victims who thought they would be enjoying retirement or at least a more relaxed lifestyle.
The victims of Stanford’s greed – and Madoff’s, too – are victims again.
In testimony in both cases, federal authorities said they had been investigating the companies years earlier. But why didn’t they pull the trigger sooner and avoid so much heartache?
In Stanford’s case, for example, some people had noticed Stanford’s portfolio had registered identical returns in back-to-back years. How does that happen? It doesn’t. Red flags that should have been raised either weren’t raised high enough or ignored.
There are no guaranteed returns. And you don’t consistently log significantly higher returns than the the rest of the industry without juicing the numbers.
But sometimes you want to believe what you see and hear. A masterful job of selling the product is enough to convince you to throw your money at it.
Stanford insists he’s done nothing wrong and hasn’t apologized for it.
“I did not run a Ponzi scheme,” he said. “I didn’t defraud anybody.”
But in February 2009 came the news of Stanford offices being closed across the country. Sure enough, the company’s luxurious Tupelo office was among them.
And two key players – Stanford’s chief financial officer, James Davis, and its chief investment officer, Laura Pendergest-Holt – had offices here.
Davis became the prosecution’s star witness, while Pendergest-Holt is up for trial later this year.
The sad pages of this tragic story will soon turn, but the book will never close completely.
Dennis Seid is the business editor at the Daily Journal. Reach him at (662) 678-1578 or email@example.com.