Drug cartel made deposit at Stanford bank

Houston Chronicle:

Authorities for years have investigated R. Allen Stanford, looking for ties to organized drug cartels and money laundering, going back at least a decade when the Texas billionaire’s offshore bank surrendered $3 million in drug money, state and federal sources told the Houston Chronicle Friday.

But no one has ever been able to make a criminal case.

Texas securities officials investigated, as did the U.S. Drug Enforcement Administration and the FBI. But none found solid evidence of a link between drug money and Stanford, who now stands accused of running a multibillion-dollar fraud at his offshore bank in Antigua and Houston-based brokerage firm.

In the late 1990s, 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, 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.

Now, more than a decade later, federal sources tell 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.

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Besides his bank in Antigua, Stanford had banks in Venezuela and a Central American country. Venezuela has been a transit point for Colombian drugs going to Africa and then Europe. Drug dealers also use banks in Central America. The story indicates that regulators have not had much luck in tying Stanford's operations to the cartel other than the one 10 years ago where he did not resist giving up the money.

It is still not clear how the possible drug money ties in with the CD's of questionable value. Was the high return on the CD's made possible because of earnings on money laundering? But if that were the case, then it would be something other than the Ponzi scheme alleged.

Stanford's conduct since the SEC action has lent credibility to many of the allegations. He does not appear to have any lawyer making a case for him and he appears to be avoiding reporters, which is not unexpected, but his side of the story is being buried by research results not helpful to his position.

His recent surfacing in the Washington DC area seems strange since his ties are to Texas and Antigua. Perhaps he has a legal or lobbying team in the DC area that is helping him lie low while they plot a defense. How they might get paid is another matter since the SEC probably has a lock on his bank accounts that they are at least aware of. Typically the SEC asks the court for a disgorgement order in major fraud cases which would wipe out the remaining cash available to some one like Stanford.