July , 2010 -- SPECIAL REPORT. Stanford International Bank became a new BCCI
WMR has learned from knowledgeable sources who have attempted to locate the global assets of the now-defunct Stanford Financial Group and its parallel Stanford International Bank, Ltd. in the Caribbean nation of Antigua and Barbuda, that the global entity resembles the former "bank of choice" for the CIA, the Bank of Credit and Commerce International (BCCI).
BCCI's fortunes began to turn sour in 1988 when its involvement in money laundering began to become public. A few years earlier, Allen Stanford moved from Texas to the Caribbean island of Montserrat to start up Guardian International Bank. Stanford's bank later abandoned Montserrat and moved to Antigua where it was re-named Stanford International Bank. As BCCI began to crumble, Stanford was able to pick up the pieces.
Within ten years, Stanford Financial Group had replaced BCCI as the company of choice for "The Company," the CIA.
Investigators who have delved into the records of Stanford reveal, "for more than twenty years, multiple US government agencies watched on as Allen Stanford built a global web of fraudulent financial companies that were managed from Stanford’s corporate headquarters in Houston, Texas. The lynch pin of the Stanford fraud was of course, the offshore bank in Antigua – Stanford International Bank (SIB)."
The Israeli Connection to Stanford
When SIBC went into receivership, court documents show that among SIBC's depositors was Yair Shamir, the chairman of Israel Aircraft Industries (IAI), the managing partner of the Catalyst Fund -- an Israeli venture capital firm that funds many U.S. defense and aerospace firms, the former chairman of El Al Airlines, and a former Colonel in the Israeli Air Force. Shamir is also politically powerful as he is the son of former Israeli Prime Minister Yitzhak Shamir.
Shamir has had his own run-ins with the U.S. Securities and Exchange Commission (SEC), which were settled on January 26, 2009 - just three weeks before the SEC filed a massive securities fraud suit against Stanford. Catalyst Fund investors are European banks, some of which are being sued for their involvement as correspondent banks for SIBL. In 2006, Stanford invested in a company funded by the Catalyst Fund, Cyalume, which makes products that utilize a chemical reaction to produce light. According to an SEC filing, most Cyalume’s revenue is from contracts with the U.S. military and NATO. At the time of insolvency, Stanford Financial Group owned 6.66% of Cyalume's stock. Other Cyalume shareholders include Ehud Barak, Israel’s Minister of Defense and Deputy Prime Minister, former vice chief of staff for the US Army General Jack Keane, and retired US Navy Commander in Chief, Pacific fleet, Admiral Archie Clemins.
Cyalume's on-line biography if Shamir states: "Yair Shamir has been a director of Cyalume since December 19, 2008. Mr. Shamir is the Chairman and Managing Partner of Catalyst Investments and the Chairman of IAI, Israeli Aerospace Industries. From 2004-2005, Mr. Shamir was Chairman of El Al, Israeli Airlines and lead the privatization process of the firm. From 1997-2005 Served as Chairman and CEO of VCON Telecommunications Ltd. From 1995 to 1997, Mr. Shamir served as executive vice president of the Challenge Fund-Etgar L.P. From 1994 to 1995, he served as Chief Executive Officer of Elite Food Industries, Ltd. From 1988 to 1993, Mr. Shamir served as Executive Vice President and General Manager of Scitex Corporation, Ltd. Mr. Shamir served in the Israeli Air Force as a pilot and commander from 1963 to 1988. During his term in the Air Force, Mr. Shamir attained the rank of colonel and served as head of the electronics department, the highest professional electronics position within the Air Force. He currently serves as a director of DSP Group Corporation and also serves as director of a few private hi-tech companies. Mr. Shamir holds a B.Sc. Electronics Engineering from the Technion, Israel Institute of Technology.
Mr. Shamir also served as a member of the board of directors of Mercury Interactive, LLC from 1997 to 2005. In September 2008, Mr. Shamir settled a complaint filed by the SEC which alleged that certain independent directors of Mercury (including Mr. Shamir) recklessly approved backdated stock option grants and reviewed and signed public filings that contained materially false and misleading disclosures about the company's stock option grants and company expenses.Without admitting or denying the allegations in the SEC's complaint, in order to settle the charges against them, each of the independent directors implicated (including Mr. Shamir) agreed to permanent injunctions against violating certain provisions of the securities laws, paid a financial penalty, and retained the ability to serve as a director or officer of U.S. public companies."
WMR has earned from defrauded Stanford customers that on December 19, 2008, Cyalume entered into a $33 million credit arrangement with Toronto Dominion Bank, which accepted the billions of dollars of wire transfers to fund Stanford International Bank CDs (it is noteworthy that none of the money to purchase Stanford International Bank CDs never actually made it to Antigua and SIB never held any funds – Toronto Dominion [TD Bank]accepted wires to fund CDs and then transferred the funds to bank accounts in Houston). Stanford Financial Group CFO James Davis, who plead guilty in August 2009, went to Israel to meet with Shamir and Prime Minister Netanyahu in the fall of 2007.
A substantial portion of the depositors in SIB are Venezuelan citizens who hid their funds off-shore to avoid taxation by Venezuela's government of President Hugo Chavez. Antigua announced it was completing its acquisition of West Indies Oil Company (WIOC) with a $68 million loan from Venezuela's state-owned oil firm, PDVSA, to PDV CAB, a private company for which Antigua is the sole shareholder. Antigua already owned 25 percent of the shares of WIOC. There is yet another Israeli angle, along with a link to BCCI, in Stanford's Caribbean operations.
The other 75 percent of WIOC was owned by Bruce Rappaport, an Israeli-born Swiss citizen and billionaire shipping giant and banking tycoon who owned the InterMaritime Bank in Geneva, which was used to provide payments to BCCI during the Iran Contra scandal. Rappaport died in January 2010. The New York Times reported Rappaport was close friends of the former CIA director William Casey, who was implicated in both the Iran-Contra and BCCI. Rappaport owned companies in more countries than can be tracked, all with obscure names that are just acronyms. According to The Times, Rappaport was a big financial backer of the Iraq oil pipeline project in the 1980s and was hired by Iran to lobby the United States to help get some kind of assurance if they built the 540 mile oil pipeline to Israel that the Israelis wouldn't just damage it like they did during the Iran/Iraq war. A State Department statement on the topic said, 'Iran had destroyed Iraq's oil terminals in the Persian Gulf early in the Iran-Iraq war. The proposed 540-mile pipeline, running from Iraq's Kirkuk oil fields to the Jordanian port of Aqaba near the Red Sea, would have more than doubled that nation's oil exports. It also would have been a 'trade bonanza' for the United States and the companies seeking to build it.'"
WMR learned from sources close to Mossad that one of the chief Iraqi interlocutors on the pipeline deal was then-Iraqi Foreign Minister Tariq Aziz, now imprisoned and in failing health in an Iraqi prison recently transferred to Iraqi government control from the U.S. military occupation authorities.
Rappaport served as Antigua's ambassador to Israel under former Antiguan Prime Minster Lester Bird, whose administration ended in 2004 when Prime Minister Baldwin Spencer ended the Bird family’s long reign of ruling the island since independent from Great Britain. Lester Bird had illegally sold Rappaport 75 percent of WIOC in the 1980s, which was only revealed to the citizens of Antigua in a New York Times article, which sparked tremendous controversy and eventually led to a lawsuit filed by Prime Minister Spencer against Rappaport, Bird, and several other Antiguan officials.
In February 2009, just two days before the SEC filed its suit against Stanford, Rappaport paid the Antiguan government $12 million to settle a $45 million lawsuit filed by the Spencer administration for a scandal involving WIOC. The suit alleged that Rappaport-owned IHI, a debt settlement company in Hong Kong, had loaned Antigua $45 million in 1996 as part of the debt consolidation. The terms of the loan specified a 25-year term with payment of $400,000 per month, of which only $200,000 was actually going to IHI. The other $200,000 per month was going to Lester Bird. Antiguan member of Parliament Asot Michael, a defendant in the suit, was represented by Hunton & Williams, the law firm based out of Virginia that also represented Allen Stanford and Stanford International Bank and has refused to release files to the U.S. Justice Department. Stanford's trial is not scheduled to begin until January 2011.
The International Monetary Fund cited the SEC lawsuit in the April 2009 country report on Antigua, saying there was corruption within the government. The report referenced no “recent” expropriation of property, despite Antiguan court proceedings to “compulsorily acquire” 49 Stanford-owned properties two months prior.
Democratic and Republican Party Connections to Stanford's Antigua scam
Ross Gaffney, a former FBI agent who oversaw a task force investigating Stanford’s operations in the late 1980s at his first offshore bank, Guardian International in Montserrat, explained the FBI had “solid intelligence” on Stanford’s alleged money laundering activities in the late 1980s. And, while that intelligence was enough to get Stanford’s banking license revoked in Montserrat, Gaffney said the Justice Department would have never have been able to successfully prosecute the charges because of the circuitous route the funds took to get to Guardian International. According to Gaffney, Stanford was laundering money for the Medellin drug cartel and the money would go from Colombia through Ecuador and through several shell companies and correspondent banks before being deposited in Guardian in Montserrat.
WMR previously reported that Stanford was protected in Ecuador by Peter Romero, Stanford Financial Group’s Advisory Council member and former US Ambassador to Ecuador and Assistant Secretary of State for Western Hemisphere Affairs in the Clinton administration. Other possible “helpers” on Stanford’s Advisory Council were Jorge Castaneda, the former Mexican Foreign Minister; Lee Brown, Drug Czar for the Clinton administration and former mayor of Houston; Adolf Ogi, former president of Switzerland; and Alfredo ArÃzaga, former minister of finance of Ecuador.
This complex pattern of international involvement, as well as Allen Stanford’s high profile associations with numerous U.S. government officials lend credibility to what Atlanta journalist Robert Coram laid out in his 1993 book, Caribbean Time Bomb: The United States Complicity in the government of Antigua – and perhaps explains it all:
"Any U.S. military aircraft, or aircraft owned by the CIA, DEA, or other agencies, can land on Antigua without prior notice, without prior approval, without the crew having to go through Antiguan Customs, and without any record being kept of the landing. This unusual arrangement is invaluable for all sorts of mischievous operations in the Caribbean and Central or South America. U.S. special operations troops have exercises in Antiguan waters and are given considerable latitude in large parachute drops and in storming beaches. Until a few years ago, they were allowed to blow up reefs as part of their training. The price to play in this little sandbox appears to be that Uncle Sam will ignore all shenanigans of the Antigua government, including abuse of its own citizens."
On June 8, 2010, the IMF announced it had finalized a $117 million loan to Antigua. The U.S. Director of the IMF voted in favor of the loan!
In November 2009, Senator Richard Shelby, with seven bipartisan co-sponsors, introduced a Senate Resolution to block aid to Antigua until it released the Stanford properties, and paid all outstanding loans and other payments made by Stanford “for the purpose of subverting regulatory oversight.” The Resolution stated, “it is the sense of the Senate that the Secretary of the Treasury should direct the United States Executive Directors to the International Monetary Fund and World Bank to use the voice and vote of the United States to ensure that any loan made by the International Monetary Fund or the World Bank to the Government of Antigua and Barbuda is conditioned on providing complete redress to the victims….” The Resolution was referred to the Senate Foreign Relations Committee, which has agreed to hold a hearing on this issue on July 29, but they will not invite the IMF, the Treasury Department, or the State Department to testify. The Obama administration appears intent on burying the Antigua and Stanford issue far into the ground. A House of Representatives companion to the Senate Resolution was introduced in the House of Representatives on March 2, 2010, by Representative Mike Coffman (R-CO), on behalf of Natalia Querard of H.M.B. Holdings Limited. Querard, an American citizen who had her property, the Half Moon Bay Resort, stolen from her in 2002. Nothing has happened with the House Resolution.
Adding insult to injury, on June 10, 2010 Secretary of State Hillary Clinton announced an additional $162 million in humanitarian aid for AIDS and H.I.V. treatment in Antigua, on top of the already committed Caribbean Basin Initiative funds allocated for this year. In a joint speech with Antigua’s Prime Minster Baldwin Spencer, Clinton promised increased US participation in the Eastern Caribbean region as she said “We are back 100 percent….We are back and we are committed.” Spencer responded with “our futures are intertwined.” The $162 million allocated mid-year in the middle of a spending freeze is coming from the Department of Defense. A July 1, 2010, New York Times article titled “Slump Cripples Aid for Drugs to Treat H.I.V.” discusses how thousands of Americans from across the country with H.I.V. and AIDS are on waiting lists and being denied medical treatment because of a lack of funding.
A la Iran-contra: Stanford and Iranian weapons smuggling
Last November, the Israeli Navy seized a ship off the coast of Cyprus carrying 320 tons of weapons in crates labeled IRISL from Iran to Syria. That ship, Francop, was registered in Antigua and flew the Antiguan flag. A Syrian businessman named Aziz Hadeed is the Antiguan senator who oversees their shipping sector, international trade and foreign direct investment. He apparently does a good job as Antigua’s shipping sector is the seventh largest in the world, according to the CIA.
Hadeed also has a monopoly on Antigua’s electricity and provides all power to the island, which reportedly has the highest per megawatt rate in the Western Hemisphere. Would not an opportunistic Syrian businessman overseeing a corrupt government’s massive shipping sector be of interest to the U.S. and its allies? Not quite. Antigua has a long history of allegations of trafficking weapons, and their government officials have been caught red-handed on occasion, including one incident in which a government official sold automatic weapons to the Medellin drug cartel in Colombia, which were used in the assassination of Colombian presidential candidate Luis Carlos Galan. However, Antigua became a major base for CIA and other intelligence money laundering around the globe, courtesy of Stanford International Bank.
The involvement of a favored CIA bank like SIBL with both opposing sides in the Middle East is nothing new. Israeli involvement in the illegal sale of weapons to the Iranians during Iran-contra and Israeli involvement with the contras was a hallmark of the 1980s scandal.
Israeli arms dealer Ya'acov Nimrodi; Israeli Foreign Ministry top official David Kimche; Mossad smuggler and hit man Yair Klein; Israeli arms dealer Al Schwimmer; Mossad gun runner and Manuel Noriega security adviser Michael Harari; and Israeli Iran-contra middleman Amiram Nir Nisker, killed in a 1988 plane crash in Mexico, all played key roles in keeping the covert weapons and money pipelines active between the Middle East and the contras and Colombian and Panamanian drug gangs.
SIBL: As global as BCCI
Stanford International Bank had depositors on record for 114 countries with a number of Middle Eastern countries represented on the list, which has been obtained by WMR. The list defies all logic based on Stanford’s advertised operations. Stanford’s depositors have been reported, until now, to be primarily Latin American and American, with small pockets of depositors in Europe and Canada. Yet, SIBL depositors from over 60 countries in Latin American, Europe, Canada and the Caribbean. And even more curiously, no Middle Eastern or Asian victims have come forward to file claims against the defunct bank. The list also includes, as WMR previously reported, a depositor from Bouvet Island, an uninhabited Norwegian island between South Africa and Antarctica in the South Atlantic.
Stanford International Bank customers by country of origin
| Country Code | Country name | Number of Customers |
| AE | United Arab Emirates | 13 |
| AF | Afghanistan | 1 |
| AG | Antigua And Barbuda | 4011 |
| AI | Anguilla | 6 |
| AM | Armenia | 1 |
| AN | Netherlands Antilles | 283 |
| AO | Angola | 1 |
| AR | Argentina | 147 |
| AT | Austria | 20 |
| AU | Australia | 7 |
| AW | Aruba | 304 |
| AZ | Azerbaijan | 1 |
| BA | Bosnia-Herzegovina | 1 |
| BB | Barbados | 19 |
| BE | Belgium | 31 |
| BG | Bulgaria | 3 |
| BH | Bahrain | 2 |
| BM | Bermuda | 4 |
| BO | Bolivia | 31 |
| BR | Brazil | 41 |
| BS | Bahamas | 7 |
| BV | Bouvet Island | 1 |
| BZ | Belize | 6 |
| CA | Canada | 224 |
| CD | Congo | 1 |
| CH | Switzerland | 41 |
| CL | Chile | 21 |
| CN | Peoples Republic of China | 7 |
| CO | Colombia | 580 |
| CR | Costa Rica | 15 |
| CU | Cuba | 4 |
| CY | Cyprus | 8 |
| CZ | Czech Republic | 2 |
| DE | Germany | 41 |
| DK | Denmark | 9 |
| DO | Dominican Republic | 44 |
| EC | Ecuador | 662 |
| EG | Egypt | 59 |
| ES | Spain | 132 |
| FR | France | 46 |
| GB | Great Britain | 219 |
| GD | Grenada | 3 |
| GH | Ghana | 3 |
| GP | Guadeloupe | 5 |
| GR | Greece | 14 |
| GT | Guatemala | 90 |
| GY | Guyana | 30 |
| HK | Hong Kong | 3 |
| HN | Honduras | 4 |
| HR | Croatia | 1 |
| HT | Haiti | 412 |
| HU | Hungary | 1 |
| IE | Ireland | 6 |
| IL | Israel | 63 |
| IM | Isle of Man | 3 |
| IN | India | 11 |
| IS | Iceland | 3 |
| IT | Italy | 72 |
| JM | Jamaica | 18 |
| KE | Kenya | 10 |
| KN | Saint Kitts and Nevis | 10 |
| KW | Kuwait | 2 |
| KY | Cayman Islands | 8 |
| LB | Lebanon | 11 |
| LC | Saint Lucia | 9 |
| LR | Liberia | 2 |
| LV | Latvia | 11 |
| LY | Libyan Arab Jamahiriya | 2 |
| MK | Macedonia | 4 |
| MQ | Martinique | 2 |
| MS | Monserrat | 2 |
| MT | Malta | 3 |
| MX | Mexico | 3865 |
| MY | Malaysia | 1 |
| MZ | Mozambique | 1 |
| NA | Namibia | 6 |
| NG | Nigeria | 2 |
| NI | Nicaragua | 34 |
| NL | Netherlands | 140 |
| NO | Norway | 3 |
| NZ | New Zealand | 12 |
| PA | Panama | 171 |
| PE | Peru | 553 |
| PL | Poland | 2 |
| PR | Puerto Rico | 18 |
| PT | Portugal | 19 |
| PY | Paraguay | 7 |
| QA | Qatar | 2 |
| RO | Romania | 3 |
| RS | Republic of Serbia | 1 |
| RU | Russian Federation | 37 |
| SA | Saudi Arabia | 2 |
| SE | Sweden | 75 |
| SG | Singapore | 12 |
| SN | Senegal | 1 |
| SR | Suriname | 8 |
| SV | El Salvador | 94 |
| SY | Syrian Arab Republic | 7 |
| TD | Chad | 1 |
| TR | Turkey | 8 |
| TT | Trinidad and Tobago | 38 |
| TW | Republic of China (Taiwan) | 1 |
| TZ | Tanzania | 6 |
| UA | Ukraine | 10 |
| UG | Uganda | 1 |
| UN | UNKNOWN | 1 |
| US | United States of America | 4380 |
| UY | Uruguay | 6 |
| VC | St. Vincent and the Grenadines | 1 |
| VE | Venezuela | 10432 |
| VG | British Virgin Islands | 132 |
| VI | Virgin Islands | 6 |
| YE | Yemen | 1 |
| ZA | South Africa | 3 |
| 27977 |
It is important to point out that SIB was not a depository institution. Its sole purpose was to issue CDs and it sold those CDs through a separate Stanford-owned entity called Stanford Group Company, which had many international offices, but no presence in the Middle East or Asia. The SIBL accounts are appear to be associated with shell or "folding tent" business set up for illegal activity, such as weapons smuggling and drug money laundering. And it appears certain that the Antiguan government was willing to overlook, or worse, facilitate such activities, with a "wink and a nod" from the CIA and other intelligence agencies.
Stanford and Libya
Allen Stanford, according to court documents, went to Libya in January 2009 and came back with a $500 million "investment" from the government of Libya. This was within three weeks of the collapse of Stanford's global empire, yet there was nowhere near the $500 million to be accounted for in either the Antiguan or the US receivership that took control of all of Stanford’s assets. Libya has never made a claim for the lost $500 million. In fact, in 2009, Libya committed to a significant development effort in the Eastern Caribbean region and announced its plans to open a commercial bank in the region, after losing half a billion in an Eastern Caribbean bank whose lead regulator was indicted by the U.S.
However, the Stanford outreach to Libya came prior to reports of negotiations between Libya and the governments of the United Kingdom and Scotland and BP to arrange for the release from a Scottish prison of Libyan intelligence agent Abdel Basset Ali al-Megrahi, convicted for the terrorist attack on PanAm 103 over Lockerbie, Scotland in 1988..., although this sordid operation was a CIA/Syrian intelligence operation wall to wall and Libya was framed for it when CIA planted false evidence on the crime scene in Scotland....in order to implicate and falsely accuse Libya..., exactly as CIA/MOSSAD are doing with the Special Tribunal for Lebanon filled with CIA/MOSSAD operatives....ready to frame the innocent again...to cover CIA/MOSSAD/Syrian Intelligence crimes and assassinations... BP reportedly lobbied for Megrahi's release so that it could lobby Libya for lucrative oil contracts. The Stanford visit to Libya also came at a time of a thawing in relations between Washington and Tripoli and the re-opening of embassies in each capital.
Stanford's Memphis connection
Stanford boasted in 2008 that St. Jude Children's Research Hospital in Memphis was Stanford's corporate charity of choice for the past three years and that Stanford and its business partners raised over $15 million for the hospital during that time period. However, on February 19, 2009, the hospital claimed it had received only $8 million, during two years, 2007 and 2008.
On October 5, 2009, WMR reported: "While investigating [Harvard virologist] Dr. [Donald] Wiley's death in Memphis, this editor met an auditor for St. Jude Children's Research Hospital in a chance encounter. The auditor reported that while it may or may not have had bearing on the death of Wiley, he had discovered large amounts of "grant" money moving through St. Jude's for purposes not related to the hospital's pioneering research into fighting childhood cancer. The recent information obtained by WMR about "bits and pieces" of contracts funding H1N1 reassortment research being passed through civilian institute sponsors coincides with the information received from the St. Jude's auditor."
Iran-contra redux
It is documented that Allen Stanford was establishing his money laundering operations in Montserrat as Iran-contra was going full steam in the 1980s. Ironically, according to Iran-contra insider Al Martin, in his book, The Conspirators, one of the shell companies set up by Iran-contra principals Oliver North and Richard Secord was called Stanford Technologies Overseas, Ltd. It and another shell company, Intercontinental Industries S.A. of San Jose, Costa Rica laundered money for Iran-contra operations using disguised loans from legitimate but sympathetic banks in the Caribbean, such as Banco Popular of Santo Domingo, Dominican Republic. In fact, Martin wrote that in the 1980s, anything with the name "Stanford" in it was controlled by Secord. The firms also included Stanford Group of Companies and Stanford Investment, Ltd.
Allen Stanford particularly targeted Antigua and Barbuda for his development fraud schemes. In the case of North and Secord, they helped concoct phony real estate development fraud schemes in another Caribbean island nation, Saint Lucia.
BCCI, a major facilitator of Iran-contra, regularly laundered money through its BCCI-Miami branch. In 1988, a junior officer of the branch, Aziz Rehman, told a Senate Foreign Relations subcommittee chaired by Senator John Kerry (D-MA) that BCCI-Miami laundered cash deposits from Caribbean and Latin American clients, ranging from $100,000 to $2 million. BCCI hid the transaction sources by electronically wiring the money from BCCI-Miami to BCCI branches in Panama and the Cayman Islands.
Rehman also said that one of BCCI's major tasks was to bribe U.S. government officials. According to Rehman, one name that was mentioned frequently at BCCI-Miami was the son of Vice President George H. W. Bush, Jeb Bush, the future governor of Florida. Jeb Bush was tied directly to the drug smuggling operations of Leonel Martinez, a major source of smuggled U.S. weapons for Eden Pastora's contra rebels based in Costa Rica. Later, Allen Stanford would also play a significant role in Florida's political and business scene, establishing himself in the former Coral Gables palatial home of Wackenhut founder, George Wackenhut, Sr.
In the 1960s, the Bahamas was a favorite location for CIA money laundering operations in its covert war and extrajudicial assassinations in the Levant and worldwide, using the infamous White House Murder INC,. Long before BCCI and Stanford, the CIA used Bahamas-based Castle Bank and Trust, Ltd. as a front for supporting CIA covert operations in Latin America and the Caribbean. Another CIA front bank was Nugan Hand of Australia. Before its demise in 1980, Nugan Hand was involved in supporting covert CIA activities in Lebanon, Syria, Australia, Indonesia, the Philippines, Thailand, and a host of other countries....
During the Clinton administration, one individual who steadfastly refused to investigate BCCI's links to the CIA was the then deputy Attorney General under Janet Reno. That individual, Eric Holder, now serves as President CIA/ Obama's Attorney General....
http://tinyurl.com/26c2zu4
and
http://www.vanityfair.com/politics/features/2007/10/iraq_billions200710
Why aren't the American people outraged over this?
During a preliminary hearing in Houston, U.S. District Judge David Hittner ruled that Stanford, charged with orchestrating an $8 billion dollar Ponzi scheme that defrauded thousands of investors, cannot be tried until he undergoes detoxification for a drug addiction acquired after his incarceration in a federal detention facility.
Talk about a convenient turn of events!
"Nothing can be done until the medical aspect is cleared up," Hittner told defense lawyers and prosecutors during an all-day hearing that examined Stanford's mental competence to stand trial, Bloomberg News reported.
The banker's court-appointed defense team is seeking a two-year delay, citing the mountain of evidence, some two million pages at last count, they must review before the trial can proceed. Stanford's apparent inability to participate in his own defense would certainly complicate matters.
With a net worth once estimated at $2 billion, the accused fraudster was declared indigent last fall after his assets were seized and (known) accounts frozen following his 2009 arrest and indictment.
In October, U.S. District Judge Nancy Atlas ruled that Stanford and codefendants Laura Pendergest-Holt, Gilberto Lopez, Mark Kuhurt and Leroy King, the former chief regulator of the Bank of Antigua, cannot tap a $100 million Lloyds of London insurance policy to pay attorney fees.
According to the ruling, "lawyers for Lloyds had proven at a trial in August that it was likely that Stanford had committed money laundering." The court declared "that the policy's money laundering exclusion applies to justify underwriters' denial of insurance coverage at this time," Reuters reported.
Indicted eighteen months ago on 21 civil and criminal counts, including mail, wire, securities fraud and money laundering, Stanford is also suspected of running another in a long line of "full service banks" for American secret state agencies, including the CIA.
Interestingly enough, one of Stanford's early defense teams was led by none other than Robert S. Bennett, the high-powered attorney who successfully fought off prosecution for his client, Jose A. Rodriguez, the former head of the CIA's clandestine division, accused of destroying 92 torture videotapes of prisoners held at Agency "black sites."
This latest twist in the sleazy affair raise uncomfortable questions for prosecutors: just how does one become drug addicted while in federal custody?
According to Bloomberg, "three psychiatrists, one working for the government and two working for the defense, testified that Stanford's dependency on prescription anti-anxiety medication and the after-effects of a head injury he sustained in a jailhouse beating left him unfit for the trial" which was slated to begin later this month.
Victor Scarano, a defense psychiatrist testified that the banker's dependency on the anti-anxiety drug clonazepam, along with the powerful anti-depressant mirtazapine, was the result of "overmedication" by his jailers.
Scarano testified that for more than a year Stanford "has been taking 3 milligrams a day of the anti-anxiety drug clonazepam, and that a normal dose is up to 1 milligram a day for no longer than two weeks," the Houston Chronicle disclosed.
The psychiatrist told the court that "he is unable to work effectively and rationally with his attorneys in his defense against the charges."
"He is unable to focus, he's unable to keep a train of thought," Scarano testified.
A second psychiatrist, Steven Rosenblatt, hired by the government, "testified that Stanford is suffering from delirium, likely brought on by the medication."
During Thursday's hearing, Stanford's attorney Ali Fazel, told the court that his client had been assaulted while in federal custody, severely beaten and that it was prison physicians who prescribed the medications to which the accused swindler is now addicted. "It's the government that caused the problem," Fazel said.
The Independent averred this will raise "fresh and disturbing questions about the deterioration of Stanford's mental and physical health in the 18 months he has already spent behind bars."
Among the questions likely to be raised is why, for some unknown and still unexplained reason prison doctors dispensed triple the normal dose of a suite of drugs known to produce untoward side effects.
According to Wikipedia, clonazepam is used to treat epilepsy, anxiety disorder and panic disorder, and in combination with lithium and haloperidol, it is also used for the initial treatment of mania or acute psychosis.
This is certainly a curious choice for long-term treatment of a concussion. While Stanford may be a notorious huckster who believed he could do no wrong, even as he allegedly robbed investors blind, there is no evidence he suffered a psychotic break with reality. In fact, the evidence suggests quite the opposite.
Clonazepam is characterized by its "fast onset of action and high effectiveness rate and low toxicity in overdose but has drawbacks due to adverse reactions including paradoxical effects, drowsiness, and cognitive impairment."
According to scholarly literature cited by Wikipedia, "cognitive impairments can persist for at least 6 months after withdrawal of clonazepam; it is unclear whether full recovery of memory functions occurs. Other long-term effects of benzodiazepines include tolerance, a benzodiazepine dependence as well as a benzodiazepine withdrawal syndrome occurs in a third of people treated with clonazepam for longer than 4 weeks."
Common side effects include drowsiness, interference with cognitive and motor performance, irritability and aggression, psychomotor agitation, lack of motivation, loss of libido, hallucinations, short-term memory loss, and what are described as "anterograde amnesia (common with higher doses)" or, the "loss of the ability to create new memories ... leading to a partial or complete inability to recall the recent past."
The second drug dispensed to Stanford, the anti-depressant mirtazapine, is used in the treatment of depression, anxiety, obsessive-compulsive disorders and is said to "exacerbate some patients' depression or anxiety or cause suicidal ideation," Wikipedia informs us.
While "the potential for dangerous drug interactions with mirtazapine is considered to be very low," the drug may "increase the effects of ... benzodiazepines," e.g. clonazepam, the apparent drug of choice deployed by Stanford's jailers as part of his "treatment."
Attorneys and psychiatrists told the court that the accused swindler was treated for more than a year with triple the "normal dose" of a drug known for producing "paradoxical effects" including "a partial or complete inability to recall the recent past."
The question is why?
While Stanford's "overmedication" may have an innocent explanation, we cannot dismiss the possibility that someone or some entity perhaps, say an intelligence agency with decades of pharmacological knowledge derived from illicit human experiments might be interested in inducing permanent "cognitive impairment" in the dodgy banker.
A simpler explanation however, such as gross negligence on the part of his jailers cannot be ruled out. It is even quite possible, as assistant U.S. attorney Gregg Costa asserted, that Stanford "could have been faking the delirium in order to be let out of jail before facing trial" as The New York Times reported.
And given the wretched conditions that exist in American gulags, where control of prison populations through overmedication is the norm not the exception, this could also be a mitigating factor in Stanford's case. As Human Rights Watch points out, prisoners adjudged mentally ill often receive "inappropriate kinds or amounts of psychotropic medication that further impairs their ability to function."
On the other hand, Allen Stanford's high-profile, his close proximity to drug-fueled intelligence operations, decades of hastily-closed investigations into alleged security frauds and a "stand down" by the SEC "at the request of another federal agency" as The New York Times disclosed, coupled with drugs investigations that "lie buried in the paperwork" gathered by the SEC as the Houston Chronicle averred, however one cares to slice it, a drug addiction acquired in federal custody does open a new, and highly suspicious, chapter in the Stanford drama.
The maddeningly complex character of Allen Stanford's operations as the Financial Times revealed, and what role other giant banks including Bank Julius Baer, Credit Suisse and HSBC, which acted as SIB's correspondent bank for all European deposits played in the affair, may never be unraveled if he cannot stand trial.
In this respect, a permanent "inability to recall the recent past" induced by federal prison authorities may be just what the doctor ordered. ....
As Antifascist Calling reported last summer, Stanford International Bank (SIB) and Stanford Financial Group (SFG), once conservatively valued at $50 billion, were no more legitimate than penny stock frauds or advance fee scams on the internet. To make matters worse, for years federal regulators turned a blind eye towards the bank's reckless practices.
As it turns out, so too did the U.S. Embassy.
Cablegate file 06BRIDGETOWN755, "Cricket Breakfast Serves Up First Encounter with Allen Stanford," dated 03 May 2006, revealed that "Ambassador Kramer met controversial Texan billionaire Allen Stanford for the first time at an April 21 'Legends of Cricket' breakfast in Barbados."
The confidential embassy cable reported that "Stanford bent the Ambassador's ear concerning his significant new tourism and property investments in Antigua and plans for his Caribbean Star and Caribbean Sun airlines."
The occasion for the meeting, an inadvertent encounter if the embassy's account is to be believed, was an April 21, 2006 breakfast at the Barbados Hilton.
Stanford, who went on to donate some $20 million to the England and Wales Cricket Board, attended the lavish affair in the company of Barbados Prime Minister Owen Arthur, U.S. Ambassador Mary E. Kramer, assorted sports stars and local luminaries.
The cable averred that "Allen Stanford is a controversial Texan billionaire who has made significant investments in offshore finance, aviation, and property development in Antigua and throughout the region. His companies are rumored to engage in bribery, money laundering, and political manipulation."
Rumored by whom, one might reasonably ask? An important point since this was certainly not general knowledge at the time, particularly amongst those who were being fleeced.
But rather than blowing the whistle when it could have mattered most to investors and Antiguan citizens, the Bush-appointed official took cover. "Embassy officers do not reach out to Stanford" we read, "because of the allegations of bribery and money laundering. The Ambassador managed to stay out of any one-on-one photos with Stanford during the breakfast."
Why would Kramer have done otherwise? After all, as Secretary of State Hillary Clinton piously intoned last month denouncing WikiLeaks, "this is the role our diplomats play in serving America."
A "Unique Investment Strategy"
When "Sir Allen" was arrested in 2009, the federal indictment charged that the high-flying Texan had sold more than $7 billion in fraudulent certificates of deposit and some $1.2 billion in mutual funds.
The centerpiece of SIB's "unique investment strategy" were financial instruments that were claimed to be safe, liquid and redeemable at a moment's notice.
According to a blurb on the "Sir Allen Stanford" web site, the Stanford Financial Group "provides private and institutional investors with global expertise in asset allocation strategies, investment advisory services, equity research, international private banking and trust administration, commercial banking, investment banking, merchant banking, institutional sales and trading, real estate investment and insurance."
The reality was far different, however. In fact, the majority of Group "assets" were in very illiquid real estate holdings and private accounts managed by just two individuals, Allen Stanford and his college roommate, James M. Davis, the bank's chief financial officer.
According to federal prosecutors, accounts were divided into three tiers, I, II and III with Tier III accounts representing "more than 80% of the purported total value of SIBL's investments."
"STANFORD and DAVIS" the charge sheet reads, "directed, managed, and monitored ... the Tier III investments. According to internal SIBL documents, as of June 30, 2008, these Tier III investments comprised the majority of the purported value of SIBL's investment portfolio. Approximately 50% of the purported value of Tier III (approximately $3.2 billion) included investments in artificially valued real estate and approximately 30% of the purported value of Tier III (approximately $1.6 billion) included notes on personal loans to STANFORD. STANFORD, DAVIS and others did not disclose to, and actively concealed from, investors, SGC and SIBL employees, and others the fact that approximately $4.8 billion in purported Tier III investments consisted of such artificially valued real estate and notes on personal loans to STANFORD."
A sweet deal if you're in on the fix.
Lured by "high rates that exceed those available through true certificates of deposits offered by traditional banks," thousands of investors were indelicately relieved of their life savings. Of the more than $8 billion hoovered up by the banker and his cronies, only about $500 million has been recovered.
This raises the question: where did all that money go? Did it just simply vanish into thin air, secret Stanford accounts, or perhaps, was it diverted elsewhere by the banker's silent partners in a certain three-lettered agency?
When asked during a 2009 interview by CNBC's Scott Cohn whether he had been "helpful" to U.S. authorities in Latin America, Stanford replied, "Are you talking about the CIA?" Cohn: "Well, you tell me?" Stanford: "I'm just not going to talk about that."
Stanford's reticence to discuss possible Agency connections are certainly understandable.
We do know however, that like many dubious banking ventures before it, Stanford Financial Group had powerful friends in high places, in the White House, Congress, amongst regulatory agencies and, plausibly, the CIA; all of whom tripped over themselves furnishing Stanford's "family" of companies with a watertight "roof."
The More Things "Change"
According to available evidence, why would the banker have believed his shady empire was on the brink of collapse in 2009, or that well-connected friends wouldn't come to the rescue? After all, it happened before.
Last year The New York Times disclosed that Stephen J. Korotash, an associate regional director of enforcement at the Ft. Worth, Texas office of the Securities and Exchange Commission (SEC) said the regulatory agency "stood down" their investigation "at the request of another federal agency, which he declined to name."
A curious admission all the more damning for regulators considering that suspicions, and hastily-closed investigations, have dogged the bank for the better part of two decades.
Damning perhaps, but not surprising.
Nearly a quarter century before charges were laid against Allen Stanford, the late investigative reporter Penny Lernoux recounted in her still-timely book, In Banks We Trust, a fraudulent scheme by Citibank (now Citigroup) to evade paying taxes while cooking the books and dodging "legal requirements on bank reserves, liquidity, and lending limits." And, similar to the Stanford grift, the SEC did worse than nothing.
Lernoux averred that even after a whistleblower and former bank vice president proved "conclusively" that Citibank had "systematically" violated the law, "the SEC's enforcement staff refused to take any action against the bank on the ground that its pursuit of unlawful profits accorded with 'reasonable and standard business judgement'."
Here's the kicker. Lernoux wrote that the "SEC also concluded that Citibank's management had no duty to disclose improper actions since the bank had never claimed its top officers possessed 'honesty and integrity'." Sound familiar?
Fast forward to the era of the Bush crime family and we learn that in 2006, BusinessWeek revealed that the president "bestowed on his intelligence czar ... broad authority, in the name of national security" to excuse companies from "their normal accounting and securities-disclosure obligations" if they revealed "certain top-secret defense projects."
Would such "broad authority" also cover financial institutions accused of laundering drug money for select "War on Terror" allies?
Interestingly enough, Bush's "intelligence czar" at the time, John D. Negroponte, was U.S. Ambassador in Honduras during the 1980s at the height of the Reagan administration's anticommunist jihad in Central America.
In addition to covering for the CIA as the Agency stood-up death squads in Honduras, Negroponte, as The Baltimore Sun revealed in 1995, turned a blind eye as America's "freedom fighters," the Nicaraguan Contras, financed their terrorist insurgency against the leftist Sandinista government by importing billions of dollars of cocaine into the United States with a major assist from their ideological soul-mates, the MedellÃn and Cali drug cartels.
Recall that during this period of intensified U.S. covert operations, the Reagan Justice Department signed a Memorandum of Understanding with the CIA. That 1982 memo, brokered between U.S. Attorney General William French Smith and CIA Director William Casey, absolved the Agency from reporting drug smuggling by their assets, the Nicaraguan Contras and Afghan mujahideen.
Leveraging their anticommunist bona fides to import massive quantities of drugs into the United States, and laundering the proceeds through a spider's web of U.S. and offshore banks including, as several investigative reports have alleged, a Stanford bank, one can only wonder whether similar cosy arrangements are in force today.
Recall also that illegal activities by institutions as diverse as Paul Helliwell's Castle Bank and Trust in the Bahamas, Frank Nugan and Michael Hand's Nugan Hand Bank in Sydney, Saudi Arabia and the Cayman Islands, or the far-flung, crooked empire of Agha Hasan Abedi's Bank of Credit and Commerce International, were all financial black holes where organized crime, drug-fueled intelligence operations and geopolitical intrigue freely intermixed.
Separated in time and geography, what all three banks had in common was their close proximity to international drug trafficking networks and the CIA, particularly in areas of acute interest to U.S. policy planners. Did Stanford International Bank have an analogous relationship with the Agency?
After all the Stanford bank, like Castle, Nugan Hand and BCCI before it had been focal points of unseemly financial practices for years. Indeed, nearly thirty years ago investigative journalist Nancy Grodin reported in CovertAction (Number 16, March 1982), that like SIB, Nugan Hand enticed prospective investors "with offers of private banking services, high interest rates (higher than anywhere else in the region), tax-free deposits and complete secrecy."
Across the decades, investigations revealed that leading figures in Castle, Nugan Hand and BCCI had actively conspired with drug traffickers to import narcotics into the United States.
Top bank officials Helliwell, Nugan, Hand and Abedi worked alongside organized crime figures and former intelligence and Pentagon officials, including a past director of the CIA. And when the chips were down, all managed to evade being held to account for the most serious charges: drug trafficking, money laundering, arms smuggling, murder, terrorism, even nuclear proliferation, precisely because such exposure would have revealed "sensitive intelligence operations."
While some might argue that in the broad scheme of things considering the depth of capitalism's economic meltdown, Stanford's alleged grift was mere chump change compared to the trillions of dollars plundered by even bigger fish.
From a parapolitical perspective however, the multiple obfuscations, smokescreens and outright falsehoods surrounding the scandal indicate this is no simple case of greed or another tawdry example of "elite deviance."
Rather, as researcher Peter Dale Scott has assiduously documented over the years, the vicissitudes of "L'affaire Stanford" may be emblematic of "continuous U.S. involvement in the global drug connection," a "global financial complex of hot money uniting prominent business ... and government as well as underworld figures" for purposes of "achieving and maintaining global American dominance."
Drug Links Covered-Up
While Ambassador Kramer may have avoided having her photo snapped with the accused fraudster, her rather pedestrian concerns pale in comparison to the fact that Stanford has been the subject of multiple drugs investigations over a 20-year period that have all been scrupulously covered-up.
Indeed, years before the federal government ran SIB to ground, earlier probes, including those investigating drug-money laundering during the Iran-Contra period were killed.
Stanford's Montserrat-based Guardian International Bank, a suspected conduit for Contra drug funds, short-circuited investigators when it pulled-up stakes, surrendered its banking license and left the island.
By 1986, evidence emerged that top Contra officials and the Agency enjoyed cosy ties with both Pablo Escobar and the Orejuela brothers, respective kingpins of the MedellÃn and Cali drug cartels.
Under pressure from the Reagan administration however, Congress and corporate media buried the drug angle to the investigation, as Consortium News journalist Robert Parry has documented in a series of groundbreaking reports.
After his departure from Montserrat under a cloud, the banker trained his sights on Antigua and Barbuda where he developed a close relationship with former prime minister Lester Bird.
The Independent reported that during the course of a joint Scotland Yard-FBI investigation, the bank "was suspected of laundering drug money from the notorious Medellin and Cali drug cartels run by Pablo Escobar and the Orejuela brothers."
"Under the Bird family leadership" The Independent disclosed, "the island was widely regarded as one of the most corrupt in the Caribbean, with well-documented links to arms and drug smuggling and money laundering."
The former FBI agent who led the Guardian probe, Ross Gaffney, told The Independent "we suspected that Stanford's bank was involved in money laundering." Gaffney said that even after Guardian closed, the FBI "continued to take an interest in Stanford and set up a second inquiry into that bank after receiving intelligence that it continued to launder money for the Medellin and Cali cartels."
The former federal agent said, "We had hard intelligence about what he was doing and we began to develop it" but that investigation died or more likely, was deep-sixed, by officials higher-up the food chain.
According to The Observer, a second FBI source "confirmed the agency was looking at links to international drug gangs as part of the huge investigation into Stanford's banking activities."
Other sources "in the US Drug Enforcement Administration" The Observer reported, "also confirmed that while the investigations into Stanford's affairs were 'with the FBI and Securities Exchange Commission, there may well have been a trail connecting his Mexican affairs to narco-trafficking interests'."
But even after the stench of Iran-Contra faded from the headlines, drug probes targeting the bank continued well into the 1990s. The Houston Chronicle reported that according to court documents "operatives of the Juarez cartel began opening accounts at Stanford's Antigua-based bank in an effort to launder money amassed under one of Mexico's most vicious drug lords, Amado Carrillo Fuentes."
"Together," the Chronicle disclosed, "they used Stanford International Bank to open 10 accounts and deposit $3 million--a small sliver of the cartel's fortunes but enough to pique authorities' interest."
Despite long-running investigations, federal sources told the Chronicle, "any alleged Stanford connection to drug cartels and their money could lie buried in the paperwork gathered for the Security and Exchange Commission's civil inquiry."
Federal officials claimed, despite probes that resulted in stiff fines for illicit practices by other U.S. banks including, most recently, Wachovia, as Bloomberg Markets magazine reported, that tracing drug profits laundered through offshore banks like Stanford's "is difficult to document."
That is, acutely "difficult" if investigators are ordered to look away, and evidence suggests they were. How else would one interpret the statement by The Observer's DEA source who told the British newspaper, "I think we'll find that any possible drug-related trail and SEC priorities are not all in the same frame."
When the scandal broke, Cablegate file 09BRIDGETOWN114, 18 February 2009, "Antigua: Upheaval on the Eve of Elections," informs us that the 17 February announcement of new parliamentary elections "was almost immediately overshadowed by an announcement by the Securities and Exchange Commission of action being taken against U.S.-Antiguan citizen Sir Allen Stanford for 'massive, on-going fraud'."
The Embassy informed the State Department that "local fears over Stanford indictment have led to a run on the Stanford Financial Group's subsidiary the Bank of Antigua, with depositors lining up for an hour or more to withdrawal their money."
As reported above, through a series of maneuvers and what were alleged to be illicit payments to former Antiguan Prime Minister Lester Bird, Stanford set up shop on the Caribbean island in 1990, and gobbled up prime real estate, acquired dual citizenship and a knighthood, and eventually took control of the Bank of Antigua in a highly-dubious "reorganization."
The ripples from the indictment spread like a rogue wave across Antigua and the Eastern Caribbean. Antiguan officials, and the U.S. Embassy, were concerned that once the depth of the fraud sank in, "unrest" would follow in its wake.
Shortly after that 2009 embassy cable, The Guardian, reported that an investigation by the Antiguan government uncovered "large payments ... in Isle of Man bank accounts controlled by Antiguan politicians."
According "to documents seen by The Guardian, HSBC bank, in the Isle of Man, accepted $3.2m (£2.3m) on behalf of Asot Michael, once chief of staff to the former Antigua prime minister Lester Bird."
"The cash under investigation" the British newspaper disclosed, "came via an Israeli businessman, Bruce Rappaport, who is alleged to have diverted Antiguan funds into his own pocket while making payments to local politicians."
HSBC denied all wrongdoing and "would publicly neither confirm nor deny information about individual Manx accounts," saying the bank "has robust anti-money laundering policies and clearly defined policies and procedures concerning politically exposed persons."
"It is unclear" the Embassy averred, "if either party will try hard to use the Stanford indictment as an election issue--Stanford amassed his fortune under an ALP [Antiguan Labor Party] government, and was knighted by a UPP [United Progressive Party] government, so all hands are likely equally dirty."
"Many worry that these issues [crime, fraud and violence] could not only spell disaster for the UPP, but for the country's economy as a whole, leading to a severe economic depression and intolerable unemployment creating more violence and a cycle of less tourism, more unemployment and more crime."
Curiously, while corporate media have focused on Stanford's lavish lifestyle, girlfriends and upscale island properties, nary a word has been whispered about the banker's alleged links to notorious drug cartels or to some of the CIA's dirtiest operations.
Even at this late date, it appears that the dodgy banker has well-connected friends who want to bury this angle of a scandal that has defrauded thousands and wrecked entire economies.
The question is, why?
Follow the Money, but Where?
Investors in the Stanford Ponzi scheme have lost their shirts, and its likely they'll never recover even a fraction of their losses.
"In the past two years" the Houston Chronicle reported, "Stanford himself has ceased to be the story. The most amazing aspect of the Stanford saga is how little money has been recovered. As the court-appointed receiver has chased assets around the globe, he's found Stanford's accounts stunningly empty."
During the investigation that led to the indictments, auditors learned that that funds were moved through Stanford-controlled accounts to offshore banks, including HSBC London; Bank Julius Baer, Zurich; Credit Suisse, United Kingdom; SG Private Banking, Geneva; Banque Franck Galland & Cie S.A., Geneva; RBS Coutts, Zurich; Coutts Bank Von Ernst, Geneva and Toronto Dominion Bank, Canada; banks which have figured in past money laundering or tax-avoidance scandals. In all, 28 numbered accounts were listed by prosecutors, veritable black holes that escaped regulatory scrutiny.
Nearly a decade ago, investigative journalist Stephen Bender wrote in Z Magazine that "an understanding of the drug trade's machinations is incomplete without an analysis of the crucial role transnational banks play in the laundering of drug proceeds."
The House Permanent Subcommittee on Investigations reported back in 2000: "Despite increasing international attention and stronger anti-money laundering controls, some current estimates are that $500 billion to $1 trillion in criminal proceeds are laundered through banks worldwide each year, with about half of that amount moved through United States banks."
Recall that at the height of capitalism's current global economic meltdown, Antonio Maria Costa, the director of the United Nations Office on Drugs and Crime told The Observer that "drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis."
Costa told the British newspaper he saw substantial evidence that that proceeds from the illicit trade were "the only liquid investment capital" available to some banks on the brink of collapse last year and that "a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."
The UN drugs chief said that in "many instances, the money from drugs was the only liquid investment capital." And with markets tanking and major bank failures a near daily occurrence, "liquidity was the banking system's main problem and hence liquid capital became an important factor."
If only a tiny portion of these illegal proceeds were siphoned-off by secret state agencies, including the CIA, funds available for covert operations and other dubious purposes, such as suborning treason amongst foreign officials to spy on their own governments, as WikiLeaks diplomatic cables revealed, the amounts would be staggering.
Bender informed us that one conduit for laundering drug profits is the private banking system.
"U.S.-based private banks" Bender wrote, "operate in a regulatory twilight zone enabling the laundering of drug profits as confirmed by the GAO. Private banks are 'not subject to the Bank Secrecy Act,' thus exempting banks from complying with 'specific anti-money-laundering provisions...such as the one requiring that suspicious transactions be reported to U.S. authorities'."
And with "international private banking" a prominent selling-point of the Stanford firm's dark web, one might reasonably surmise that drug traffickers would also view this regulatory black hole in the most favourable light.
Indeed, this "twilight zone" was precisely where Allen Stanford operated. As The Miami Herald reported, state and federal regulators allowed SIB to move "vast amounts of money offshore--without reporting a penny to regulators."
SIB's arrangements with the Florida Office of Financial Regulation were so lax that the company "was allowed to sell hundreds of millions in bank notes without allowing regulators to check for fraud." Indeed, Florida regulators granted Stanford's bank "sweeping powers never given to a private company."
But what if that "private company" were handed an exemption from "their normal accounting and securities-disclosure obligations" as BusinessWeek reported, on grounds of "national security," and investigations into that firm were squashed "at the request of another federal agency," wouldn't this also suggest that Stanford's Ponzi scheme may have also been a cover for ongoing U.S. intelligence operations?
And once the scope of the fraud became too large to ignore, it wouldn't be a stretch to conclude that the Agency decided to cut their losses and "move on"?
As investigative reporters Jonathan Beaty and S.C. Gwynne uncovered in their stunning exposé, The Outlaw Bank, it wouldn't be the first time.
For years the CIA had concealed their close involvement with the crooked Bank of Credit and Commerce International (BCCI), tied to everything from drug trafficking to money laundering and from nuclear proliferation to the financing of terrorist groups, including those that morphed into Al-Qaeda.
And when they "came clean" to Treasury Department officials in a report that remains classified to this day, "suddenly, and for no apparent reason," Beaty and Gwynne wrote, Treasury "lost all interest in BCCI."
Perhaps for similar reasons too, in the years ahead we'll find that "any alleged Stanford connection to drug cartels and their money could lie buried in the paperwork gathered for the Security and Exchange Commission's civil inquiry," where its likely to stay buried.
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