As multiple stories about fraudulent investment plans have come to light, the term "Ponzi scheme" has become a common phrase in the American vocabulary over the past year. The term was originally coined based on the deception practiced by an Italian immigrant named Charles Ponzi, who was swindling Americans out of their money around the turn of the last century. The most infamous person of our day to develop this illegal scheming is Bernard Madoff. This Wall Street power broker has milked his clients out of millions of dollars and now finds himself restricted to his Manhattan apartment as charges against him move forward. While Houston might not be witnessing a Ponzi scheme in its truest definition, the charges filed against Texas billionaire Robert Allen Stanford are certainly not too endearing.
The Securities and Exchange Commission has brought civil charges against Stanford in a Dallas federal courtroom. His offshore bank, two of his Houston-based companies, and two fellow officers in the business are facing charges as well. The SEC complaint alleges that Stanford sold $8 billion in CDs with promises of "improbable and unsubstantiated" high interest rates in return. In addition, the SEC claims instead of providing the safe, independently audited, and well-monitored investment that he promised, Stanford operated the bank only with a close circle of family and friends.
Recently, the U.S. Marshalls' Office in Houston sent agents to the Stanford offices to make sure documents and computers were not disturbed. Soon, the doors were locked and even investors who were concerned about their money were unable to get any answers. With all of the finances now in the hands of an appointed receiver and the money stuck in an offshore bank, the unlucky people caught up with Stanford may be waiting a couple of years to see any of their money again.
Bertolino LLP has Houston attorneys who practice in the area of business law and litigation. If you have been accused of underhanded practices with your management of investor funds, our business lawyers in Houston, Austin or San Antonio can help. If bad publicity has damaged your company's reputation, our Houston, Austin and San Antonio business lawyers can work with you to get your good name back. Please contact our attorneys at our Austin, Houston, or San Antonio office today to discuss your situation.