2000-08-22
New law allows localities to sell tax liens to state agency
(APW_ENG_20000822.0131)
1) Local governments will be able sell delinquent property tax liens and transfer the job of collecting overdue taxes to a state agency under a bill signed into law by Gov. George Pataki Tuesday.
2) The new law allows the Municipal Bond Bank Agency (MBBA) or a trust created by the agency to purchase tax liens on the property of delinquent taxpayers and take over enforcement of the liens.
3) Meanwhile, municipalities, which depend heavily on real property taxes as a revenue source, will gain funds by selling the liens to MBBA. ''Budgetary imbalances'' resulting from tax delinquencies would therefore be avoided under the new law, said the bill's sponsor, state Sen. John Marchi, R-Staten Island.
4) Pataki said the law will also benefit taxpayers by reducing pressure on municipalities to raise property taxes to compensate for uncollected property taxes.
5) Current law requires tax districts to enforce liens, a legal claim attached to property of delinquent taxpayers. Municipalities also cannot sell the liens to other parties, and the MBBA doesn't have the authority to purchase tax liens.
6) Under the new law the MBBA would issue obligations secured by the real property liens, and proceeds from those bonds would become payment to the municipalities for the liens.
7) Market analysts have indicated a cost-effective transaction would require at least $35 million to $50 million in delinquent tax liens - an amount only the largest of New York state's municipalities could amass. The new law will enable smaller localities to participate by pooling their liens and sharing proceeds from their sale.
8) Marchi said local governments theoretically could foreclose properties, but that process is time-consuming and foreclosure costs could be costly.
9) ''Experience teaches us that securitzation of tax liens, when accompanied by adequate safeguards, will be the most beneficial in the local provisions of capital needs,'' Marchi said.
10) ''Tax lien securitization will provide a centralized, efficient and reliable means of ensuring full collection of municipal taxes,'' added Edward Farrell, executive director of the New York State Conference of Mayors.
11) Officials said law is similar to a program in New York City that has recovered millions of dollars in lost property tax revenues over the past years.



2009-02-19
Disgraced banker Stanford didn ' t pay his own taxes
(APW_ENG_20090219.0016)
1) Public records show disgraced financier R. Allen Stanford owes hundreds of millions of dollars in federal taxes.
2) The records show four federal tax liens against Stanford totaling more than $212 million. The liens are from 2007 and 2008.
3) Federal officials charge Stanford with bilking investors out of billions of dollars by claiming unrealistic returns. His bank is closed following a raid Tuesday.
4) Stanford is known for an extravagant lifestyle, including private jets, friendships with congressmen and big spending on sport sponsorships and charity.



2009-03-16
US federal agency can pursue Stanford for taxes
(APW_ENG_20090316.1060)
1) A federal judge is allowing the U.S. tax collection agency to go after at least $226.6 million in back taxes, penalties and interest it says are owed by R. Allen Stanford, the Texas billionaire who has been accused of conducting an $8 billion investment fraud through an offshore bank.
2) U.S. District Judge David C. Godbey in Dallas also granted Friday the request of the Internal Revenue Service to order Stanford to file his tax return for 2007 by April 15. Stanford and his wife, Susan, may owe taxes in addition to the $226.6 million for 1999-2003, the IRS said in a court filing.
3) Stanford was charged with fraud last month by the Securities and Exchange Commission in a civil proceeding. He has been ordered to surrender his passport but hasn't been charged with a crime.
4) The IRS filed four tax liens against Stanford in 2007 and 2008. In August, the Stanfords requested a due-process hearing by the IRS' Office of Appeals to contest a lien filed in July for tax years 2002 and 2003 and a notice of intent to collect back taxes, the IRS said in its court filing. The IRS said the Stanfords also have contested the validity of what it says are their tax liabilities for those two years.
5) Stanford's personal fortune has been estimated at $2.2 billion by Forbes magazine. His assets were frozen and put into receivership after the SEC lodged its civil complaint against him on Feb. 17.
6) In an amended complaint filed Feb. 27, the agency accused Stanford and his finance chief James M. Davis of conducting a "massive Ponzi scheme" through companies they controlled, including Antigua-based Stanford International Bank. In a Ponzi, or pyramid, scheme, early investors are paid returns from money put in by later investors.
7) An attorney representing Stanford has said his client denies the allegations made by the SEC.
8) In addition to the bank, which sold the certificates of deposit the SEC alleges promised unrealistically high rates of return, Stanford's businesses in Antigua include a newspaper, restaurants, a development company and the Stanford cricket grounds. He also owns private jets.
9) Stanford and Susan Stanford, his wife of more than 30 years, are currrently in divorce proceedings in Texas. They jointly own homes in Antigua, Texas, Florida and the U.S. Virgin Islands, according to court filings.
10) Stanford and Davis have invoked their right against self-incrimination and refused to testify or provide documents in the SEC's case against them.
11) The chief investment officer of Stanford's parent company, Laura Pendergest-Holt, faces criminal charges of obstructing the SEC's investigation by lying about her knowledge of the firm's activities and omitting key details. Her attorney has said she was "set up" by Stanford and Davis.
12) Godbey, the federal judge in the case, last week approved a request from the court-appointed receiver that could release more than $4 billion in previously frozen funds to Stanford investors.



2009-03-17

2009-06-19

2009-06-20

2009-06-23
AP source: Indicted billionaire headed to Texas
(APW_ENG_20090623.0373)
1) Billionaire R. Allen Stanford was expected back in Texas on Tuesday to face federal charges he ran a $7 billion swindle with his international banking empire.
2) A federal grand jury in Houston has indicted Stanford and six executives of Stanford Financial Group, accusing them of orchestrating the massive fraud by advising clients to buy certificates of deposit from the Antigua-based Stanford International Bank. Stanford was arrested Thursday in Virginia.
3) A law enforcement official said Monday that Stanford was en route to Texas. He was being taken by U.S. Marshals to Houston, according to the official who spoke on condition of anonymity because discussing the transfer was not authorized. The official said the trip would consist of two separate flights and Stanford was expected to arrive in Houston sometime Tuesday morning.
4) The indictment charges that Stanford's banking empire was really just a massive Ponzi scheme. It alleges Stanford and the other Stanford Financial Group executives falsely claimed to have grown $1.2 billion in assets in 2001 to roughly $8.5 billion by the end of 2008.
5) All seven are charged with wire fraud, mail fraud and conspiracy to commit securities fraud. Stanford also is charged with conspiring to obstruct a Securities and Exchange Commission proceeding.
6) Investigators say that even as Stanford claimed healthy returns for roughly 30,000 investors, he was secretly diverting more than $1.6 billion in personal loans to himself.
7) Dick DeGuerin, Stanford's lawyer, said in a written statement Friday that Stanford was "confident that a fair jury will find him not guilty of any criminal wrongdoing."
8) Stanford could face as much as 250 years in prison if convicted on all charges in the 21-count indictment, officials said.



2009-06-25
Billionaire Stanford pleads not guilty to fraud
(APW_ENG_20090625.0856)
1) Texas billionaire R. Allen Stanford has pleaded not guilty to charges he swindled investors out of $7 billion as part of a massive investment scam.
2) Stanford entered his plea during his arraignment Thursday in federal court in Houston. The financier was indicted last week by a grand jury on charges that his international banking empire was really just a colossal Ponzi scheme.
3) Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, three Stanford Financial Group executives who were indicted along with their former boss, also entered not guilty pleas during the court hearing.
4) U.S. Magistrate Judge Frances Stacy's decision on whether to grant a bond for Stanford was expected later in the day. Stanford was arrested in Virginia on June 18.



2009-12-28
AP: Ponzi collapses nearly quadrupled in ' 09
(APW_ENG_20091228.0652)
1) It was a rough year for Ponzi schemes in the United States. In 2009, the recession unraveled nearly four times as many of the investment scams as fell apart in 2008, with "Ponzi" becoming a buzzword again thanks to the collapse of Bernard Madoff's $50 billion plot.
2) Tens of thousands of investors, some of them losing their life's savings, watched more than $16.5 billion disappear like smoke in 2009, according to an Associated Press analysis of scams in all 50 states.
3) While the dollar figure was lower than in 2008, that's only because Madoff -- who pleaded guilty earlier this year and is serving a 150-year prison sentence -- was arrested in December 2008 and didn't count toward this year's total.
4) In all, more than 150 Ponzi, or pyramid, schemes collapsed in 2009, compared to about 40 in 2008, according to the AP's examination of criminal cases at all U.S. attorneys' offices and the FBI, as well as criminal and civil actions taken by state prosecutors and regulators at both the federal and state levels.
5) The 2009 scams ranged in size from a few hundred thousand dollars to the $7 billion bogus international banking empire authorities say jailed financier Allen Stanford orchestrated, as well as the $1.2 billion scheme they say was operated by disbarred Florida lawyer Scott Rothstein. Both have pleaded not guilty.
6) While enforcement efforts have ramped up -- in large part because of the discovery of Madoff's fraud, estimated at $21 billion to $50 billion -- the main reason so many Ponzi schemes have come to light is clear.
7) "The financial meltdown has resulted in the exposure of numerous fraudulent schemes that otherwise might have gone undetected for a longer period of time," said Lanny Breuer, assistant attorney general for the U.S. Justice Department's criminal division.
8) A Ponzi scheme depends on a constant infusion of new investors to pay older ones and furnish the cash for the scammers' lavish lifestyles. This year, when the pool of people willing to become new investors shrank and existing investors clamored to withdraw money, scams collapsed across the country.
9) "Some portion of the investors in the Ponzi scheme always get the short end of the stick and do not get paid," said Elizabeth Nowicki, a former Securities and Exchange Commission attorney who now teaches law at Boston University.
10) Even those who say they did their homework before investing ended up losing everything.
11) A retired Air Force sergeant, Tom Annis searched the Internet for red flags like complaints or lawsuits involving Minneapolis-based host Patrick Kiley after hearing about his investment on a weekly Christian radio show called "Follow The Money."
12) Finding none, the 63-year-old from Jacksonville, Florida, invested his $270,000 savings -- money that has since evaporated after federal regulators shut down what they've called an elaborate, $190 million Ponzi scheme.
13) "I tried to do my level of due diligence," Annis said. "How could I be duped like this after years of investing?"
14) Ponzi schemes, named for infamous swindler Charles Ponzi, are extremely simple: Investors attracted by promises of high profits are paid with money from an ever-increasing pool of new investors, with the scammer skimming off the top. Sometimes the investments are at least partially legitimate but more often are completely fictional. There's no reserve fund for lean times, or for when droves of investors start demanding their money.
15) Ponzi himself was an Italian immigrant who concocted a scheme in 1919 involving bogus investments in postal currency. He cheated thousands of people out of $10 million, eventually going to jail for wire fraud before being deported back to Italy in 1934.
16) Eighty years after his scheme, federal statistics paint the picture of a Ponzi nation:
17) --The FBI opened more than 2,100 securities fraud investigations in 2009, up from 1,750 in 2008. The FBI also had 651 agents working in 2009 on high-yield investment fraud cases, which include Ponzis, compared with 429 last year.
18) --The SEC this year issued 82 percent more restraining orders against Ponzi schemes and other securities fraud cases this year than in 2008, and it opened about 6 percent more investigations. Ponzi scheme investigations now make up 21 percent of the SEC's enforcement workload, compared with 17 percent in 2008 and 9 percent in 2005.
19) --The Commodity Futures Trading Commission filed 31 civil actions in Ponzi cases this year, more than twice the 2008 amount.
20) Many of the 2009 cases have yet to head to trial. In its tally, the AP counted schemes in which prosecutions were initiated or in which regulators filed civil cases in 2008 and 2009.
21) The Justice Department does not have totals of how many people were convicted in Ponzi schemes for either year, or for previous years.
22) Experts believe the recession was the main reason for the collapse of so many Ponzi schemes, though the Madoff case brought greater regulatory scrutiny and heightened public awareness. More people are inclined to raise questions when things don't look right.
23) "We do get a lot more questions from investors now," said Denise Voigt Crawford, Texas Securities Comissioner. "They are really worried about Ponzi schemes. That's a good thing."



2010-02-25
British court: Stanford scheme centered in Antigua
(APW_ENG_20100225.1716)
1) The British Court of Appeal on Thursday upheld a ruling that an alleged Ponzi scheme by jailed Texas financier R. Allen Stanford was centered on the Caribbean island of Antigua, not the United States.
2) The decision was a defeat for a receiver appointed by U.S. courts to liquidate Stanford assets, Dallas lawyer Ralph Janvey. He had argued that even though the bank where the scheme originated was in Antigua, its "nerve center" was in the United States.
3) The British court failed to consider that Stanford International Bank "was one of many Stanford entities used in the perpetration of a massive Ponzi scheme that was orchestrated from the United States and U.S. territories," Janvey said in a statement from his law office.
4) Vantis Business Recovery Services, a British firm appointed by Antiguan authorities to liquidate the assets of the island-based bank, said it was pleased by the court's ruling.
5) The two receivers have been fighting over who has jurisdiction over the Stanford assets, frustrating investors who are hoping to recover money they invested.
6) Stanford and other executives of the now-defunct Houston-based Stanford Financial Group are accused of orchestrating a Ponzi scheme by advising clients to invest more than $7 billion in certificates of deposit from the Antigua bank.
7) Investors from 113 countries were promised huge returns on their CDs and assured their investments were safe. But authorities say Stanford and the executives fabricated the bank's balance sheets, bribed Antiguan regulators and misused investors' money to pay for Stanford's lavish lifestyle.
8) Stanford, who had been Antigua's largest private employer and was locally known as "Sir Allen," has pleaded not guilty, along with the three executives. Once one of the world's richest men, Stanford is now awaiting trial in Houston on charges of operating a Ponzi scheme.
9) Another former executive, James M. Davis, has pleaded guilty and is cooperating with U.S. prosecutors.
10) The British court also affirmed a lower court decision to recognize Vantis as the foreign representative of Stanford International Bank in Britain. But the court also ruled that roughly $100 million located in the Britain will be subject to a restraining order obtained by the United Kingdom's Serious Fraud Office.
11) Janvey said the order preserves the funds in Britain so they can ultimately be transferred to the U.S. Department of Justice and distributed to investors.
12) Vantis, which had sought to lift the restraining order, said Thursday it planned to appeal that decision, arguing that keeping the money frozen "will only further delay the release of funds to investors."



2010-03-03
Antigua, 4 other Carib spots on US laundering list
(APW_ENG_20100303.1435)
1) The island where financier R. Allen Stanford allegedly based a $7 billion Ponzi scheme is one of five Caribbean spots on the latest U.S. list of major money laundering countries.
2) A State Department report said Monday that money laundering problems in Antigua and Barbuda tied to schemes involving investment fraud and advance fee fraud have not been corrected.
3) The report, however, does not mention Stanford, a Texas financier accused of promising inflated returns on certificates of deposit from an Antigua bank. He has pleaded not guilty.
4) The overseas British territory of the Cayman Islands, which has been lobbying in Washington to thwart a crackdown on offshore financial centers, also remains on the list, along with the Bahamas, Dominican Republic and Haiti.



2010-06-03
Judge staying out of Stanford legal fees dispute
(APW_ENG_20100603.1130)
1) A federal judge says she is not getting involved in whether an insurer should pay for jailed Texas financier R. Allen Stanford's latest criminal defense team.
2) During a court hearing Thursday in Houston, U.S. District Judge Nancy Atlas said any disagreements between Stanford and the insurer, Lloyd's of London, will have to be worked out between themselves.
3) But Atlas questioned whether Stanford's current criminal defense team was bloated with too many individuals and whether it was being efficiently run.
4) The insurer is refusing to approve Stanford's newest criminal attorney, saying it's already spent more than $6 million on lawyers to defend Stanford in criminal and civil cases related to charges he bilked investors out of $7 billion in a Ponzi scheme.



2010-08-26
Lawyers: US financier didn ' t tap investor money
(APW_ENG_20100826.0623)
1) Lawyers for R. Allen Stanford say the U.S. financier did not take out $1.7 billion in deposits made to his now defunct Caribbean bank and use them for loans to himself.
2) Stanford's attorneys were trying to shoot down claims made by a fraud examiner who has testified the financier used the money as personal loans.
3) Stanford's financial dealings were being examined during a court hearing Thursday in which a federal judge was to decide if Stanford and two ex-executives of his now defunct companies will continue having their legal bills paid for by an insurance policy. They are fighting charges they bilked investors out of $7 billion in a massive Ponzi scheme.