In 2012, Allen Stanford was convicted in Houston of 13 fraud-related charges and sentenced to 110 years in prison. But the case – a Ponzi scheme in which Stanford sold billions of dollars worth of fraudulent certificates of deposit through its offshore bank Stanford International Bank Ltd. – wasn’t over yet. It ended this week when TD Bank agreed to pay $1.2 billion to settle a lawsuit that alleged it collected millions in Canadian and US currency while ignoring evidence that something fishy was going on with the Stanford bank in Antigua.
CNN quoted from a TD Bank statement, which said in part that it “expressly disclaims any liability or wrongdoing with respect to the multi-year Ponzi scheme operated by Stanford and makes no admission in connection with any Stanford matter as part of the settlement .” The bank’s statement said it “primarily provided correspondent banking services to Stanford International Bank Limited and claims to have acted correctly at all times.”
The settlement prevented a trial that was set to begin Monday in Houston. TD settled for the largest amount, but Independent and HSBC banks were tapped for $100 million and $40 million, respectively. CNN reports that in addition to TD, HSBC and Independent investors believed that Trustmark and Societe Generale Private Banking should have known about Stanford’s alleged plan, and the lack of action on their part amounted to playing a role in perpetrating the scam over two decades.
Trustmark and Societe Generale settled their parts of the case earlier in 2023 for a combined $257 million.
Stanford reportedly pursued what amounted to a classic Ponzi scheme. While telling clients that their certificates of deposit were yielding 3 to 4% more than the US national average and promising reliable investment programs, Alan Stanford filled his pockets with their money and reportedly owned several homes in the US and the Caribbean.
