Allen Stanford

Stanford Operation Was Ponzi Scheme From The Start, Says Number 2

Zachary Roth | August 28, 2009, 12:59PM

Allen Stanford

Yesterday, we got new details on Allen Stanford's alleged $8 billion fraud, with the release of the plea deal signed by the Texas banker's number 2 man.

Jim Davis, Stanford's college roommate and the CFO of the Stanford Financial Group, pleaded guilty to conspiracy, mail fraud and obstruction charges. He told prosecutors that the company was a sham from the start, using money from new investors to pay off old ones. Davis also described how for years he helped cover up the scheme, and helped bribe a top Antiguan regulator to keep the SEC off the scent.

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