$8 Billion CD Scam Revealed

Submitted by Melissa Hoffmann on Tue, 02/17/2009 - 16:11

The SEC today brought charges against Robert Allen Stanford and three of his companies for orchestrating a fraudulent, $8 billion dollar investment scheme centering on a CD program.

The SEC's complaint, filed in federal court in Dallas, alleges that acting through a network of related financial advisers, Stanford's company, Stanford International Bank, sold "certificates of deposit" to investors by promising improbable and unsubstantiated high interest rates.

These rates were supposedly earned through the company's "unique investment strategy," which purportedly allowed the bank to achieve double-digit returns on its investments for the past 15 years.

Unique indeed. 

Somewhat ironically, Stanford International Bank recently tried to distance itself from the OTHER big fraud, allegedly perpetrated by Bernard Madoff. In an attempt to calm investors, Stanford claimed no exposure to Madoff's Ponzi scheme in an open letter.

Take a look at the bank's Web site, which is still online. Here's its "CD calculator."

And read news stories about this remarkable swindle here, here and here.

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