R. Allen Stanford convicted for Ponzi scheme

Robert Allen Stanford arrived for a bond hearing at a courthouse June 25, 2009 in Houston, Texas. He has now been convicted by a jury for fraud.

Jeremy Hobson: A Federal Jury in Texas has convicted Allen Stanford of defrauding investors to the tune of $7 billion in a Ponzi scheme. Stanford could face life behind bars, and prosecutors say they may only be able to find $300 million to pay back investors.

Marketplace's Mitchell Hartman reports.

Mitchell Hartman: The high-living Texas financier was convicted of using fraud to inflate the value of his Stanford International Bank.

The $7 billion fraud pales in comparison to Bernie Madoff’s $50 billion-plus scheme. But it’s still significant, says securities lawyer Tom Ajamie.

Tom Ajamie: This is huge. Any time you have a scam that’s a billion dollars-plus, that’s just a tremendous amount of money. And don’t forget here, he had at least 30,000 customers affected by this -- in many cases lost all of their money.

University of Houston law professor Adam Gershowitz says even with this high-profile conviction, fraud investigators have their work cut out for them.

Adam Gershowitz: If you’re a billionaire cavorting in the Caribbean, running an enormous Ponzi scheme, you’re probably a little more scared today than you were last week. Your average white-collar criminal is much more difficult to detect, engaged in much lower-level fraud or manipulation.

Stanford’s lawyers say he’ll appeal.

I’m Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.


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