The manager of an Antiguan bank was taken into federal custody yesterday after his banking group’s operations were determined to have possibly misled investors in regards to $8 billion in certificate of deposit sales. According to Bloomberg, R. Allen Stanford was arrested yesterday after surrendering to Federal Bureau of Investigation agents in Fredericksburg, Virginia.
Stanford and his associates at the Stanford Group are accused of selling certificates of deposit, while claiming the money would be used in simple financial instruments; instead, the firm invested the portfolio in risky private equity and real estate transactions. The bank then claimed “improbably, if not impossible” returns, according to the Securities and Exchange Commission.
Also implicated in the case are Stanford CIO Laura Pendergest-Holt and CFO James M. Davis. Pendergest-Holt was arrested in February.
Stanford, who was rated as the 605th richest person in the world in Forbes’ last rankings, has asserted his innocence in the matter. “I’m not a damn swindler,” he said in an interview with Bloomberg in April.
Stanford Group was placed under receivership in February.