One week later, federal agents raided Stanford's gold-plated Houston offices, and the Securities and Exchange Commission arrived in Dallas federal court accusing him of "orchestrating a fraudulent, multibillion-dollar investment scheme centering on an $8 billion CD program." The government froze all of Stanford's clients' assets; the SEC had 'em a countrified Bernie Madoff...and a guy with a "Sir" in his name, no less.

That's why, for the last two months, Messina's gone from investing his clients' money to trying to liberate it from the federal government. He is working with Dallas attorney Larry Friedman to retrieve their assets, and each day, Messina speaks either over the phone or via e-mail with his clients about where that money might have gone and how they might one day get at least some of it back. It's beyond any kind of worst-case scenario Messina could have ever imagined.

Betrayed. That's how he feels now. On his clients' behalf. And on his own.

Above: Dallas attorney Larry Friedman represents some 150 investors whose assets were frozen after the SEC filed its complaint against Stanford, his bank and others. Below: Charles Hazlett, a top Miami investment broker with Stanford Group, aired his fears about the company as early as 2003.
COURTESY OF Friedman & Feiger, LLP/JAKE DEAN
Above: Dallas attorney Larry Friedman represents some 150 investors whose assets were frozen after the SEC filed its complaint against Stanford, his bank and others. Below: Charles Hazlett, a top Miami investment broker with Stanford Group, aired his fears about the company as early as 2003.

When he looks back on that day in Arizona, he sees Stanford differently now—as someone who knew what was going down but was forced to keep it to himself. "He wasn't a man trying to connect with the people," Messina says. "He was a man alone."

Well, not quite alone. Today, Stanford; Laura Pendergest-Holt, the company's chief investment officer; and James Davis, the firm's chief financial officer, face accusations that claim they swindled investors out of $8 billion in a massive Ponzi scheme run out of Houston, South Florida and the Caribbean, taking money for supposed certificates of deposit and then simply paying off old customers with the new cash. The question remains why it took regulators so long to catch on, especially with several employees crying foul for years.

The fallout has been devastating. More than 300 Stanford employees in Texas have lost jobs, thousands of investors have had accounts frozen and about 30,000 worldwide have lost a total of $8 billion in life savings to the giant house of cards. And each allegation has dealt another body blow to America's already teetering confidence in government safeguards and the economy.

Even more than Bernie Madoff's tale, Allen Stanford's rise and fall is the story of the past decade in America, where greed mixed with cynical politics birthed a perfect storm for accused hucksters such as Stanford to bring the global economy to its knees. And as Stanford's story shows, the warning signs were there. They were simply ignored.

----

When the elevator doors open to the posh Stanford offices in Miami, the wealth and vision once synonymous with the fallen firm are glaringly obvious.

Well-worn, brass-studded leather couches rest on rich Oriental rugs, conjuring images of an old-money British banker in his study. Leather-bound volumes and yellowed globes line polished mahogany bookshelves next to huge impressionist oil paintings.

For a time, these three floors seemed like the center of a new investment empire built by a man who did everything in his power to change his origins.

Robert Allen Stanford was born in 1950 in Mexia, an oil boomtown on the plains of central Texas about 85 miles south of Dallas.

He lived in Mexia until the fourth grade, when his parents separated and he moved with his mother to Fort Worth. But those who remember him from that young age say that even then, he was famous for trying to make a buck.

"He was always known as an entrepreneur," says Bob Wright, editor of the Mexia Daily News and a family acquaintance. "He liked to make money, and he always seemed to have a few things going."

In high school, Stanford played football, and at Baylor University, he taught scuba lessons to make extra money. His roommate at Baylor, James Davis, became a lifelong friend.

Stanford graduated from Baylor in 1974 with a business administration degree and joined his father in Mexia to help run the family insurance business. But Stanford had bigger plans.

"I couldn't stay in a small town and be content," Stanford told Forbes magazine last fall.

By the early 1980s, Stanford had persuaded his father to sell the insurance business and join him in Houston as a real estate speculator. Houston's market had crashed after the oil bubble burst, and the Stanfords began buying up distressed properties at bargain prices.

By the mid-'80s, Allen Stanford had set his sights beyond real estate. In December 1985, with a few million in start-up cash from his father, he established an offshore bank called Guardian International Bank in Montserrat, a small British territory in the Leeward Islands.

The bank earned licenses to manage international banking accounts and in five years grew to about $14 million in holdings. But by 1990, Stanford faced an Internal Revenue Service lawsuit accusing him of owing the government $420,000 in unpaid taxes—and at the same time, the British government successfully pressured the territory to toughen regulations on its banks. In 1991, Stanford withdrew his license in Montserrat and began looking for another Caribbean home.

He found it later that year in the tiny island nation of Antigua and Barbuda, a country of about 85,000 in the middle of the Lesser Antilles. Stanford relocated to Antigua and split his company into the two central pieces that still exist today. The first, called Stanford International Bank, was housed in a hillside estate in the island's capital city of Saint John's. The other arm, called Stanford Group Company, was based in downtown Houston. He made his college roommate, James Davis, director and chief financial officer of both companies. Stanford, though, was the sole shareholder.

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