David Brancaccio: Right out front in the Ponzi scheme Hall of Fame is Bernard Madoff: the New York financier pled guilty to a 65 billion dollar fraud in 2009. But if prosecutors are right, Allen Stanford should have his own shrine. Stanford's accused of a $7 billion scheme to defraud investors. The case may have fallen off your radar, but Stanford's on trial in a Houston court and today, the government's star witness is on the stand.
Terri Langford is a Houston Chronicle reporter covering the trial. Morning Terri.
Terri Langford: Good morning.
Brancaccio: Remind us about the whole Allen Stanford situation. He's accused of crimes involving dollar figures that have a B for billions, right?
Langford: That is correct. He is accused in a 14-count indictment of fraud through CD sales from his offshore bank in Antigua. He was arrested, and he is considered the largest accused Ponzi schemer to be tried.
Brancaccio: So as you've watched the trail so far, is there an emerging picture of Allen Stanford himself?
Langford: Probably you would have to say that was tied to the testimony of James Davis, his former CFO. He worked for Stanford for nearly 20 years. He's talked about secret bank accounts in Switzerland, he's talked about bribes to Antigua. Others have testified again and again about his sort of quick temper; that he had a desire to always have the best buildings, the best service, the best of everything.
Brancaccio: I think the world will be paying close attention to the Allen Stanford trial, in part to figure out how systems set up to protect investors broke down so spectacularly, it seems.
Langford: That's what's been really interesting to watch -- how often or infrequently the SEC seemed to check in. In 2005, they sent a letter to Antigua, saying they were interested. Little did they know, that the Antiguan regulator they were sending to was supposedly on the payroll. I covered government a lot, and people I talk to in government always say 'you expect too much of government, you give us too much credit.' And we have to remember that it's very slow, and sometimes -- and that's what happened here. There were people that had suspicions, but they didn't quickly follow through.
Brancaccio: Terri Langford, Houston Chronicle, thank you very much.
Langford: No problem, thank you.