Breaking Down the Allen Stanford Conviction and Its Aftermath—Steven Berk — Transcript

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1. 0:02this is alex bien TV and on Colin
2. 0:06O'Keefe today we are taking a look at
3. 0:07the conclusion of the allen Stanford
4. 0:10trial Stanford was convicted last week
5. 0:12in a 7 billion dollar Ponzi scheme
6. 0:14joining me today is Stephen Burke
7. 0:16washington DC class-action lawyer and
8. 0:19former federal prosecutor he authors the
9. 0:21corporate observer an excellent blog on
10. 0:23corporate misconduct starting off
11. 0:25Stephen you know for those who don't
12. 0:27know honestly this case was a little bit
13. 0:29off my radar coming in but then I saw a
14. 0:31lot of people talking about it can you
15. 0:33give us the background on Stanford and
16. 0:35what he was convicted of yes a good
17. 0:38morning Colin um yes Stanford was sort
18. 0:41of number two in the rogue rogues tales
19. 0:44of Ponzi scheme errs just behind mr.
20. 0:47Madoff he put together what he called a
21. 0:50bank when it really wasn't a bank it was
22. 0:53a Ponzi scheme and he sold certificates
23. 0:55of deposit which was really just paper
24. 0:58and he ran this all out of an operation
25. 1:01in Antigua where he became quite a hero
26. 1:05he bought a cricket team and became a
27. 1:09knight I believe in Antigua and the
28. 1:11Caribbean so he was quite a flamboyant
29. 1:14guy sadly though he stole a lot of money
30. 1:17and it wasn't money from folks that were
31. 1:19well-heeled like the Madoff investors
32. 1:22yeah I mean it's just it's just sad to
33. 1:24watch but yeah let him quite the life
34. 1:26where you could just print pieces of
35. 1:27money sell those and then move down to
36. 1:29someplace else we can be a hero but what
37. 1:32was Stanford's defense here and was he
38. 1:34really the only one fault I know in
39. 1:36these situations often times it doesn't
40. 1:38just come down to two one individual who
41. 1:40messed up well that's absolutely right
42. 1:42Colin I mean it's hard to steal that
43. 1:44much money by yourself um you know I was
44. 1:47a big fan with my sons of the oceans 11
45. 1:50the series and it took what 10 or 15 man
46. 1:53crew to steal 150 million so seven
47. 1:56billion dollars you can't do it alone he
48. 1:59had an organization he had banks he had
49. 2:03financial service companies helping him
50. 2:05interestingly on the criminal side he
51. 2:08alone was the one that was convicted I
52. 2:10don't I think his number two man was the
53. 2:12guy who testified against him will
54. 2:14probably go to jail as well
55. 2:16but in terms of who is involved you know
56. 2:19typically these guys will have a bank
57. 2:21that they're working with other
58. 2:23financial services companies but he's
59. 2:26the only one that's going to take the
60. 2:27take the hit yeah this isn't the bank
61. 2:30that he was working with coming under a
62. 2:31bit of scrutiny now I'm not true pose
63. 2:32from the Department of Justice or who
64. 2:34but I I thought you mentioned that they
65. 2:35had become under a bit of scrutiny as of
66. 2:37late no you know it Kyle this is you
67. 2:40know sort of my take on a lot of these
68. 2:41Ponzi schemes is the bank's knew
69. 2:43something or had to know something
70. 2:44because the money came in and just went
71. 2:46out and it really wasn't an investment
72. 2:48but as far as i know the bank that he
73. 2:50was working with is not under
74. 2:51investigation they should be probably
75. 2:55but they're not yeah yeah that's it it's
76. 2:57interesting how those happens how when
77. 2:59these transactions come in and out but
78. 3:01it doesn't you know raise any red flags
79. 3:02and then finally you know now that
80. 3:05Stanford has been convicted and he
81. 3:06likely faces you know life in prison for
82. 3:09what he's done you know what relief to
83. 3:11the victims get if any I know in these
84. 3:13situations it's not necessarily you know
85. 3:15what you think they deserve yeah
86. 3:17unfortunately well I guess the good news
87. 3:20for the investors is there's a 300
88. 3:22million dollar fund of seized assets mr.
89. 3:27Stanford was quite a wheeler-dealer he
90. 3:29had a you know jet airplanes homes and
91. 3:32cash and probably expensive wine and
92. 3:36whatnot and that all totaled up to about
93. 3:38300 million dollars the government has
94. 3:40so they'll take that three hundred
95. 3:42million dollars and put together some
96. 3:45sort of fun will do where they will be
97. 3:47able to distribute that to the victims
98. 3:49of this fraud on the problem is the
99. 3:51victims are out approximately seven
100. 3:53billion dollars so the money that's been
101. 3:57recovered or been seized is about four
102. 3:59percent of that so if you assume that
103. 4:02some people don't take the money you
104. 4:04know maybe four or five percent out of
105. 4:07out of the total so they'll get
106. 4:09something back but it will obviously be
107. 4:12very very small amount yeah you know
108. 4:14it's just a shame with these types of
109. 4:15things you know people will get somebody
110. 4:17will make off with such a large amount
111. 4:19of assets large amount of money and they
112. 4:20only get such a a small percentage back
113. 4:22because that's just there's no other way
114. 4:24to solve it but yeah and in this
115. 4:26situation you know these people were
116. 4:28buying certificate
117. 4:29deposit so they thought they were buying
118. 4:31fairly conservative investments right it
119. 4:33wasn't you know sort of some crazy loopy
120. 4:36kind of hedge fund or something like
121. 4:39that it was a CD which back in the day
122. 4:42was considered a very safe investment
123. 4:44but not in this case yeah it's just a
124. 4:48shame it's just a shame well again that
125. 4:50was Stephen Burke Burke law and the
126. 4:52excellent blog the corporate observer
127. 4:54for more on this story stephen has a
128. 4:55great series of posts on it be sure to
129. 4:57check out the corporate observer com and
130. 4:59of course you know we've grouped these
131. 5:00all together in a tag so search for it
132. 5:02search Brown Stanford or yeah allen
133. 5:05stanford on Alex plx blog com thanks
134. 5:08Steven thank you come