(Thanks to nwmuse for researching the story)

While the Republican majority and the Bush administration in line with a number of crooked Democrats were busily creating the Ponzi scheme a.k.a. Bush’s economic policy, the fat cat crooks were equally busy in ripping off investors.

We all have heard about Madoff, of course, but here’s another one. His name is R. Allen Stanford, and he’s a Texas billionaire:

The US Securities and Exchange Commission (SEC) lodged 25 pages of allegations with a court in Detroit yesterday, detailing a $9.2 billion fraud allegedly perpetrated by Mr Stanford and three companies he controls.

(read article)

Full text of complaint by the Securities and Exchange Commission.

Eschewing the prospect of a Madoff-style luxury arrest, Stanford decided to split the scene and fly to Antigua, but his credit card was refused. He has disappeared nevertheless. Meanwhile, desperate customers are trying to get their money back.

More than 600 people queued outside two branches of the tycoon’s Bank of Antigua in an attempt to withdraw their cash, even though the bank is not one of the companies involved in the alleged fraud. Similar panic was reported in Panama, where bank regulators stepped in to take control of the Stanford Bank Panama – also not involved in the fraud allegations – after retail customers began a run on it.

(read more)

There are speculations that the damage done could be well in the vicinity of Madoff’s $ 50 billion fraud.

Stanford invested heavily into getting legislation focused away from money laundering as far back as 2000 and a couple of familiar names crop up in the bipartisan list of his beneficiaries:

Stanford’s [l]obbying disclosure reports in 2000 made it clear that the company had only one interest in federal policy: money-laundering legislation. Former Treasury Department official confirmed, in interviews with Public Citizen, that Stanford Financial vigorously opposed the legislation – along with several other Texas-border banking institutions – in meetings held on Capitol Hill. Between February 2000 and June 2001, Stanford Financial gave Republican party committees $208,000 and Democratic party committees $145,000. But Stanford didn’t stop there. Stanford Financial and R. Allen Stanford gave another $95,000 to the 527 groups of three influential politicians – Senate Majority Leader Tom Daschle ($40,000), House Democratic Caucus Chairman Martin Frost ($50,000), and Senate Minority Leader Trent Lott ($5,000). In doing so, Stanford became the single largest contributor between July 1, 2000 and June 30, 2001 to the 527 groups of Daschle and Frost. (read more)

The New York Times has more details and the juiciest bit at the end of their story:

The current S.E.C. charges stem from an inquiry opened in October 2006 after a routine exam of Stanford Group, according to Stephen J. Korotash, an associate regional director of enforcement with the agency’s Fort Worth office. He said the S.E.C. “stood down” on its investigation at the time at the request of another federal agency, which he declined to name, but resumed the inquiry in December 2008.

Another federal agency. Figures.

Honestly, I’m sure we will be busy writing about similar cases still. Whatever wealth may have been created during the Bush years – and Paul Krugman makes the case that none was – filled the pockets of crooks. Now that figures, too.

UPDATE: It now turns out that the SEC’s fraud charges may be the least of Stanford’s worries. Federal authorities tell ABC News that the FBI and others have been investigating whether Stanford was involved in laundering drug money for Mexico’s notorious Gulf Cartel.

UPDATE 2: Found! Accused Scammer Stanford Turns in Passport in Washington

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