Allen Stanford faces court in America
Flamboyant billionaire Allen Stanford is tonight staring at a potential 375 year jail sentence if found guilty of a range of alleged offences by the US courts. He stands convicted of fraud, money laundering and obstruction of justice in relation to an alleged $7 billion pyramid scheme. Stanford gave himself up to federal agents earlier today and will take the dock along with five other executives from Stanford Financial Group and a bank regulator from the Caribbean island of Antigua.
This is a subject which we covered some time ago amid allegations that between 5000 and 6000 investors were "tricked" into joining a number of investment programmes run by the Allen Stanford Group which are alleged to have been nothing short of pyramid schemes. These are schemes which effectively pay income and capital returns to existing investors using funds from new investors. The very nature of this particular fraudulent activity means that when the money stopped rolling in there were no more funds to pay out existing investors and the scheme collapsed.
In this particular instance the alleged $7 billion appears to have "disappeared into thin air" with investigators only able to locate $300 million held in banks in the UK, Switzerland and Canada.
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