 Sir Allen Stanford arrived at Lord's in a helicopter |
When the people who run English cricket took Sir Allen Stanford's money and allowed him to park his helicopter on their lawn as he arrived amid a frenzy of excitement they said they had checked him out. They thought the tall Texan was perhaps a bit brash for their tastes, but solid and, perhaps most importantly, solvent. In Panorama: The Six Billion Dollar Man, we find out that Sir Allen was not at all as he seemed. More over, his story appears to be something of a metaphor for what has happened in the wider financial world in recent months - a lack of questions asked at the right time and then, suddenly, reality hits smack between the eyes like a full toss from a fast bowler. Twenty20 Sir Allen came to prominence last year when he sponsored a high-profile Twenty20 cricket tournament, which culminated in a match between England and an all-stars West Indies team that gave each winning player $1m. But in February of this year, the man who once boasted that "It's fun being a billionaire", saw his empire begin to crumble.  | STANFORD'S FINANCIAL EMPIRE The first Stanford company was founded in Texas in 1932 by Lodis B Stanford, Sir Allen Stanford's grandfather Stanford Financial Group is a complex worldwide network of affiliated financial services companies The group reports it has over $50 billion in assets Stanford International Bank, Antigua-based affiliate that claimed $7.2bn in assets and 28,000 clients around the world. Sir Allen Stanford is chairman and sole shareholder Sources: Panorama research, corporate websites, Securities and Exchange Commission |
That was when the businessman, who operated mainly out of the Caribbean island of Antigua, stood accused over a multi-billion dollar investment fraud by US financial regulators. The Securities and Exchange Commission (SEC) said the financier had orchestrated "a fraudulent, multi-billion dollar investment scheme". The SEC said the fraud was "based on false promises and fabricated historical return data" and the Federal Bureau of Investigations seized his passport. Ten weeks after the SEC filed its civil complaint, no criminal charges have been pressed against Stanford but the FBI is investigating and a criminal case is expected. Meanwhile, off-shore investors around the globe are holding on to near-worthless investment certificates. This week, Panorama takes us to the place where it all began for Allen Stanford, the Lone Star state of Texas, where his Stanford Group of Companies empire was run. Reporter John Sweeney notes that every aspect of the business features Sir Allen's eagle and slash logo and the 12 floors of a gleaming Houston office block that his enterprises once occupied smell of money, success and bare-faced front. 'It's no Ponzi' Sweeney explains how Sir Allen Stanford's considerable assets have been frozen amid accusations that he ran an elaborate fraud or Ponzi scheme - effectively robbing Peter to pay Paul. Sir Allen has vigorously denied the accusations and has insisted in interviews on American television that "It's no Ponzi". The British receiver, Nigel Hamilton-Smith, called in by the government of Antigua, when asked by Panorama if he has uncovered the $7.2bn (£4.8bn) in deposits recorded in Stanford International Bank's books, says: "Nothing like it." When John Sweeney asks him outright: "Is Stanford International Bank bust?", Hamilton-Smith responds, "Without a shadow of doubt". The receiver added: "There is a deficiency of $6.7 billion." Six Billion Dollar Man hears about Stanford's boyhood in the town of Mexia, where he was born and raised in the Baptist church. Stanford's first business was a chain of health clubs called Mr and Mrs Heath Studios in nearby Waco. We meet his father, James Stanford, 88, who still has complete confidence in both his son's abilities, and his innocence. In 1982 Stanford's health club business was made bankrupt and he declared personal bankruptcy in 1984, owing $13m (£8.6m) at the time.  Allen Stanford's love of cricket included the partners of some England players. Photo: Courtesy Sky Sports |
The future billionaire was down, but definitely not out. In Miami, Rodney Gallagher, who advised the Foreign Office about banking in the Caribbean, tells Panorama that he met Stanford in the 1980s. "Allen Stanford was very much a marketing man," Mr Gallagher recalls. "The image that comes across is one of a rather brash Texan. He's a man who revels in business success and all its trappings. He saw people who were obstacles as people who should be pushed out of the way." Reinvented Sweeney tells us how Stanford the bankrupt transformed into Stanford the banker, setting up shop as Guardian International Bank on the small British colony of Montserrat - best known for its active volcano. The programme hears from Mr Gallagher that Montserrat was, at that time, the place to be if you were looking for lax banking rules. "The banking sector in Montserrat in particular was considered to be out of control," he says of the climate at the time. "The overwhelming majority were not banks of the sort that the British government would have liked to have seen on the high street in Guildford." Panorama obtained details of a secret 1990 Montserrat government report that warns of Sir Allen's bankruptcy and raises suspicions that he may be involved in money-laundering on a substantial scale. "Alan (sic) Stanford is the prime force behind the bank's operations and it has recently come to our notice that he is also a former bankrupt…Its President has come under suspicion of money-laundering on a substantial scale…a figure of $60 million has been mentioned," the report states. Stanford has always maintained that his Guardian International Bank did nothing wrong. But, frustrated by the authorities' threats to revoke his license, Sir Allen moved his operations to the next island along, the former British colony of Antigua and Barbuda. We hear about Sir Allen's close relationship with former prime minister Lester Bird and see how his banking empire bought up large tracts of the tourist paradise. In 1999, Allen made out a cheque for $3.1m to the US Drug Enforcement Administration, money which had originally been deposited with the Stanford International Bank by agents for the Mexican drug lord Amado Carrillo Fuentes. This is proof that Stanford International Bank did attract Mexican drug money - whether or not Stanford knew about it at the time. It is thanks to his close ties to former prime minister Bird that Allen Stanford became 'Sir Allen' in 2006 - for his "services to the community and economic development". Follow the money As his wealth grew in the Caribbean, his business expanded homeward to America.  The chopper arrival at Lord's turned a few heads in English cricket |
Panorama travels back to Houston to meet a former colleague turned critic who resigned from Stanford's company over concerns that the real returns for clients were lagging behind those offered in promotional material - perhaps the clearest early warning sign that all was not as it seemed. From here, Panorama brings it home to Lord's Cricket Ground in London - the ancestral home of cricket - and hear how Sir Allen managed such a slick takeover of the game. Jonathan Agnew, the BBC's cricket correspondent, describes those heady days when big money from Texas met English cricket. "Even now there's an air of disbelief about the whole thing. Did it really happen? Did this man, this Texan who basically said that our cricket was rubbish land his helicopter here on the nursery ground at Lord's? You still have to almost rub your eyes as if it was a very bad dream." Agnew points out that other countries' cricket governing bodies had taken a pass on a deal with Sir Allen. "We thought our administrators had completely lost the plot. What they were doing associating themselves with a man like Sir Allen Stanford who'd already been turned down by South Africa, by India, and by Australia. They didn't want anything to do with him." Panorama: The Six Billion Dollar Man, 11 May 2009, BBC One at 8.30pm.
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Did this man, this Texan who basically said that our cricket was rubbish land his helicopter here on the nursery ground at Lords? You still have to almost rub your eyes as if it was a very bad dream
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