Mortgage Fraud Epidemic: How the FBI Blew It and Why There's No 'Perp Walks'

Mortgage Fraud Epidemic: How the FBI Blew It and Why There's No 'Perp Walks'

By the way: " Have you seen Stanford lately?"

FBI finds Allen Stanford in Virginia
Thu Feb 19, 2009


Stanford whereabouts unknown after charges: SEC

WASHINGTON (Reuters) - Federal regulators said on Wednesday they do not know the whereabouts of billionaire Texas banker Allen Stanford, charged with "massive" international financial fraud, federal regulators said on Wednesday.
"We are unaware of his whereabouts," SEC spokeswoman Kimberly Garber said from Texas. Asked if Stanford may be outside the United States, she said, "Certainly that's a possibility but we don't know.

(Source Reuters) Stanford whereabouts unknown after charges: SEC
U.S. marshals assisting the SEC have been unable to serve Stanford with court orders freezing assets and appointing a receiver to run his Stanford Financial Group companies since a raid on his Houston headquarters Tuesday, Garber said.
The FBI is in communication with the SEC regarding the Stanford case, FBI spokeswoman Shauna Dunlap said. She gave no more details. "The FBI is certainly aware of the SEC investigation, and we have been in contact with the SEC," Dunlap said.
The SEC said in court papers disclosed Tuesday that Stanford had failed to appear in recent weeks for testimony ordered by subpoena.
CNBC reported that he had tried to hire a private jet to fly one-way to Antigua from Houston, but the jet lessor refused to take his credit card.

Stanford Support for sports includes:

* Stanford's own private Twenty20 cricket competition in the Caribbean, including a $20 million game in November between England and his own team made up of West Indian players.

* Endorsement relationships with Fijian golfer Vijay Singh and England soccer player Michael Owen.

* Host sponsor of the 2009 Sony Ericsson Open tennis event in Biscayne, Florida on March 23-April 5.

* Sponsors venues at the Houston Polo Club and International Polo Club in Palm Beach, and sponsors the Stanford Charity Polo Day at the Royal Military Academy Sandhurst in the UK.

* In golf, it sponsors the PGA Tour's Stanford St. Jude Championship in Memphis, Tennessee.

* Sponsors the Stanford Antigua Sailing Week


Allen Stanford is accused of a fraud (not a Ponzi scheme), a fraud which could turn out to be from the same magnitude as the Madoff fraud.
Late news: unconfirmed rumours about Stanford International Bank being involved with money laundering in the Caribbean and for Mexican drug cartels.

Stanford clients swarm banks
(01:45) Report Reuters Video
Feb. 18 - From Mexico City to Caracas, hundreds of depositors lined up to pull money out of Stanford affiliated banks.

Regulators said they don't know where Stanford is. Fred Katayama reports.From South to North America, hundreds of anxious depositors lined up. They're rushing to pull out their money from banks affiliated with the Texas billionaire accused of fraud. This after U.S. regulators charged Allen Stanford with a "massive" $8 billion dollar fraud.In Houston, Texas, investor Romina Sumpter stood outside Stanford's U.S. headquarters.(SOUNDBITE)(English) Romina Sumpter, investor, saying:"I pray I don't lose everything I invested because it is my inheritance, and it only happens once in a lifetime, and I'm sad to see Mr. Stanford is doing this."Venezuelan bank regulators said Venezuelans had invested billions of dollars in Stanford's bank branch on the island of Antigua.In Antigua's capital, St. Johns, the line stretched around the corner of the Bank of Antigua. More than 600 people waited even though authorities said the bank had sufficient reserves and is separate from Stanford's affiliate that faces U.S. charges.In Mexico City, the dozens who lined up were mostly middle-aged and elderly. Karyna Kleinckwort, a widow, had invested all of her money there. She said, "We don't know what's going on. We are really worried and desperate."Regulators said they don't know where Stanford is. Using his Antiguan affiliate, Stanford International Bank, he's accused of fraudulently selling certificates of deposits that boasted higher than normal yields. But the Stanford case is a lot smaller than that of the 50 billion dollar fraud allegedly carried out by money manager Bernard Madoff. And so far, no criminal charges have been filed. Fred Katayama, Reuters.

Harry Markopolos saw inside Madoff scam 9 years ago and filed complaint with SEC

Harry Markopolos

Massachusetts investor saw inside Madoff scam 9 years ago, but few listened BOSTON (AP) -- His repeated warnings that Wall Street money manager Bernard Madoff was running a giant Ponzi scheme have cast Harry Markopolos as an unheeded prophet.

But people who know or worked with Markopolos say it wasn't prescience that helped him foresee the collapse of Madoff's alleged $50 billion fraud. Instead, they say diligence and a strong moral sense drove his quixotic, nine-year quest to alert regulators about Madoff.

"As the market goes up and down, this strategy should have done a little better or a little worse, just like everybody else," he said. "Instead, it appeared to be indifferent as to whether the market went up or down. They made money all the time."
Markopolos complained to the SEC's Boston office in May 1999, saying it was impossible for the kind of profit Madoff was reporting to have been gained legally.
But Madoff continued to thrive, even as Markopolos continued to pursue the case.
In 2005, he submitted a report to the SEC saying it was "highly likely" that "Madoff Securities is the world's largest Ponzi scheme." In the report, he says he knew his research could ruin people's careers and asked the SEC be discreet about circulating the report and his name.
"I am worried about the personal safety of myself and my family," he wrote.
The report highlights 29 "red flags" about Madoff's business, among them the returns of a third-party hedge fund managed by Madoff's firm which had negative returns in just seven on the 174 months Markopolos analyzed. Read whole article on Yahoo...

Markopolos Madoff Complaint

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The most important conclusion of 2008

It's not only a question of lessons to be learned from what happened in the World Economy and on the Stock Markets in 2008, but also a matter of conclusions to be drawn.
The most important conclusion just unexpectedly popped up last week when the Madoff story broke and this week when the effects of the Madoff maelstream begin to appear.

When 'very trusted people' (VTP) suddenly prove untrustworthy, people can begin to lose confidence in: authorities, a method or system, themselves or their fellow citizens.
This year we watched the failings and mistakes of: bankers, brokers, politicians, business leaders, bureaucrats, scientists, advisors, authorities and a lot more.
Even the Securities and Exchange Commission (SEC) failed to control and audit Madoff, although there were allegations of his financial wrongdoing since 1999. (See link beneath)
The latest results will ripple through and eventually calm will be restored, but it's worth thinking about the long term effects of loss of confidence and trust.
As a whole however, Investors and the Investment Community simply shrugg off the Madoff effect on the market, it is no more than a piece of rather shocking bad news. Next year the results will show or not. For the moment it only adds to the recession. And it all depends in how far the hedge funds will be hit.
Even the battered Fortis investors (in the Netherlands) do not seem to have sleepless nights after the news Fortis was hit by a possible 1 Billion Euro loss through the Madoff scam.
Anyway, the world has really changed in 2008! This is our preliminary conclusion by the way, an open door with unknown consequences and opportunities.

President-elect Obama says: 'Regulators have been asleep at the switch'.
This seems to be a common international problem we noticed.

See this link: Obama names 3 more for his financial team, says regulators have been 'asleep at the switch'

SEC chairman says agency failed to probe Madoff
December 17th, 2008

WASHINGTON (AP) — In a stunning rebuke, the Securities and Exchange Commission chairman blames his career regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff, now accused of running one of the largest Ponzi schemes ever.
On Tuesday night, SEC Chairman Christopher Cox ordered an internal investigation of what went wrong and offered a scathing critique of the conduct of his staff attorneys. He said they never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena. Instead, the staff relied on information voluntarily produced by Madoff and his firm.
Credible and specific allegations regarding Madoff’s financial wrongdoing going back to at least 1999 were repeatedly brought to the attention of SEC staff, said Cox.