Sir Allen Stanford: 'It's baloney, baloney, baloney'

Texan tycoon breaks silence over Ponzi claims
Billionaire expects to be indicted within two weeks
Sir Allen Stanford
Allen Stanford, who arrived at Lord’s by private helicopter last year, now has to travel by scheduled airline: ‘They make you take your shoes oﬀ, it’s terrible’. Photograph: AP /AP

The billionaire financier Allen Stanford has broken his silence to declare that the $8bn fraud accusations levied against him by US prosecutors are "baloney" and he will "die and go to hell" if his business empire is a Ponzi scheme.

During an eccentric performance outside a Houston restaurant in which he appeared close to tears and at one point threatened to punch his interviewer, Stanford admitted to ABC News that he expected to be indicted by a federal jury on criminal charges within two weeks.

But the founder of cricket's Twenty20 international tournaments cast himself as an ordinary man and insisted that account holders at his network of Stanford banks have not lost a penny.

"I'm the maverick rich Texan where they can put the moose head on the wall. And that's the only reason they went after me," said Stanford. "I'm fighting for my survival and for my integrity."

The banking tycoon, who has kept a low profile in the two months since the US securities and exchange commission (SEC) accused him of defrauding investors to the tune of $8bn (£5.4bn), appeared to fight back tears as he said of his crumbling empire: "I've worked all my life, I've given everything I have, I love my employees. I care for everybody in this company."

Federal investigators have suggested that Stanford, 59, was operating a Ponzi scheme similar to the swindle masterminded by the Wall Street fraudster Bernard Madoff - a comparison which clearly riled the cricket impresario.

"Baloney, baloney, baloney," he said. "It's not a Ponzi scheme. If it's a Ponzi scheme, why are they finding billions and billions of dollars all over the place?"

Referring to queues of depositors outside branches of his banks in the Caribbean, Stanford said: "It broke my heart. But nobody lost a dollar. Is that a Ponzi scheme? Is that a Ponzi scheme? Tell me, is that a Ponzi scheme?"

While Stanford has been charged with civil offences by the SEC, the only criminal charges to date are against Stanford's chief investment officer, Laura Pendergast-Holt, who is accused of obstructing justice. In a potentially ominous sign for the billionaire, Stanford's former chief financial officer, James Davis, recently agreed to co-operate with prosecutors.

Regulators maintain that Stanford swindled customers by trumpeting misleading rates of return to persuade thousands of people to invest in purportedly ultra-safe "certificates of deposit", the proceeds of which were swiftly funnelled offshore.

Stanford told ABC that these instruments had been misunderstood: "Our returns in the boom years ... were lower than anyone else's. They don't talk about that. Just when things went down, we were able to maintain our returns."

He said the only "minor issue" for his empire was restating its accounts, and said it had assets to back up clients' money.

Stanford's personal fortune was estimated by Forbes magazine at $2.2bn last year. But his assets were frozen when the US authorities raided the offices of his Stanford Financial group in Dallas.

He insisted that he was not a big spender: "I've always lived very frugally. I flew around in a private jet, I had a boat, but I've always lived very frugally."

He appeared bemused, however, by standard security measures for people taking commercial flights in the US: "They make you take your shoes off and everything, it's terrible."

Stanford's arrest caused near panic on the island of Antigua, where the billionaire was knighted and where his companies are the largest employer after the government. The scandal has prompted runs on his banks in several Latin American countries and has forced the international cricket authorities to cancel a web of lucrative sponsorship deals with Stanford.

Several US media outlets have suggested that Stanford is under investigation for laundering money for Mexican drug cartels. Stanford snapped: "If you say that to my face again, I will punch you."

He said involvement in such activity would be "foreign to everything in my body" and that he had also been the subject of wild rumours he was a CIA spy.

Anxious to present himself as an ordinary mortal, he added: "I'm not a high-fallutin' guy. What people have always said about me is that I'm more in touch with the valet and the maître d' than I am with the president or the CEO.

"I've always felt, lived and dreamed what the common guy and woman wanted. That's where you make your money: because you understand them."

Man of property

Allen Stanford began in real estate, purchasing property during the 1980s downturn and selling at a profit once the economy recovered. Flushed with cash, he moved to the Caribbean and set up his first bank on Monserrat before transferring to Antigua. He expanded into wealth management, catering for the newly rich in Latin America. Antigua and Barbuda, a British dependency, granted Stanford citizenship and knighted him in 2006. Forbes magazine once listed him as the world's 605th richest man, with assets of $2.2bn. He was a donor to both Barack Obama and rival presidential candidate John McCain.
Owen Bowcott