Jail time for Ponzi perp

It seems Bernie Madoff has company in the white-collar crime hall of fame.

Texas banker Allen Stanford has been sentenced to 110 years in prison for operating one of the largest Ponzi schemes in history.

Stanford’s sentence compares to the 150-year verdict handed to Madoff. The Department of Justice originally called for a statutory maximum of 230 years for Stanford, who was the sole beneficiary of his scheme.

Over the course of more than 20 years, the self-acclaimed hard worker defrauded thousands of customers of $7 billion, using the funds to finance his lavish lifestyle. He gambled and purchased real estate, and also bought a fleet of airplanes and an international cricket tournament.

Officials called him a ruthless predator whose audacity further illustrated his depravity when he asked for only time served. They considered him baseless, self-serving and exceptionally deserving of the maximum punishment.

The fraud began prior to 1990 when he was operating Guardian International Bank on Montserrat, says the U.S. District Court’s sentencing memorandum. The bank then relocated to Antigua and changed its name to Stanford International Bank, but continued running the same scheme.

The company sold one product: certificates of deposit that averaged a return 3%-to-4% higher than those from domestic U.S. banks. According to the memo, Stanford claimed low taxes and low overhead resulted in higher yield.

First, he diverted money into various speculative real estate ventures. By late 1990, half the bank’s reported assets did not exist. Instead, Stanford was funneling the company’s funds into a web of companies he owned, using overseas bank accounts to launder the misappropriated funds, says the memo.

Stanford was redirecting millions from the bank to keep his businesses open by 2008.

Stanford claims his actions were not part of a scheme at all. He says he invested in legitimate real estate and properties, and denied all allegations against him.

Regarding the memo, the Wall Street Journal reports Stanford as saying the facts are incorrect, and that in filing such a document, the government is no better than those who manipulate facts during political campaigns.