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Stanford: Ponzi Scheme? What Ponzi Scheme?

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Accused of fraud, financier points finger at former CFO James Davis.

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As the Watergate scandal boiled in November 1973, President Richard Nixon declared in a nationally televised speech, "I am not a crook."

We know how that one turned out. So, you'd think that a financier accused of defrauding thousands would have learned something from Nixon's incredible claim - or at least his decision to open his mouth and insert both feet.

"I don't think there is any money missing," R. Allen Stanford told the New York Times."There never was a Ponzi scheme, and there was never an attempt to defraud anybody."

Stanford is suspected of fraud that may have involved as much as $6 billion in certificates of deposit issued by Stanford International Bank on the Caribbean island of Antigua, though he hasn't yet been charged with any crime.

In February, the Securities and Exchange Commission (SEC) filed a civil lawsuit alleging that Stanford and 2 other executives engaged in international fraud. The legal action effectively shut down the operation.

In an interview with the Times, Stanford said the assets of some clients may have declined in value, but insisted that any fraud had been committed by the organization's former chief financial officer, James Davis.

The former CFO is cooperating with investigators, and that could be trouble for Stanford if the whole mess ends up before a judge - especially in criminal court.

Stanford denied a charge by the SEC that he pocketed $1.6 billion from his company without disclosing it. He said the money went to "investments" and accused the government of using "Gestapo tactics."

Okay - where did the money go, Mr. Stanford?

"The investment and risk committee reported to Jim Davis, not to me," he told the Times. "The Stanford International Bank quarterly report was produced in Tupelo, Mississippi, under Davis's direction and signed off by him. I trusted his integrity."

Ah yes, another babe in the woods who trusted a guy who, as fate would have it, wasn't Bambi.

Nixon's thundering defense of his Watergate mendacity was a replay of his self-abasing "Checkers" speech that saved his career in 1952. It didn't work the second time around, and Nixon soon resigned.

Stanford appears to be adopting the same deaf, dumb and blind defense embraced by another Ponzi schemer. The basic question: Will Stanford be the next Bernie Madoff?

Moral for pols and financiers: If you have nothing to offer except wild claims and flaccid denials, shut up.
No positions in stocks mentioned.
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