Scamfluencers - Allen Stanford: The Lord of the Lies

Episode Date: July 8, 2024

After a Texas oil bust forces him into bankruptcy, Allen Stanford looked abroad for a new opportunity: starting an off-shore bank in Antigua and using client money as his own personal piggybank. Soon, he’s spending billions on private planes, his own cricket grounds and estates all over the world. To keep his scheme going, he bullies his coworkers, makes blood oaths with regulators, and threatens to punch reporters in the mouth. But when the global financial crisis hits in 2008, Allen’s bravado is met with cold hard reality.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wondery Plus subscribers can listen to scamfluencers early and ad-free right now. Join Wondery Plus in the Wondery app or Apple podcasts. Sachi, we talk about offshore banking a lot on this show, but do you actually know what it is? Not really. I mean, it's just having a bank account off ashore, right? Yeah, you know what? It is one of those things where when people say it, you don't actually understand what

they're doing with their money. It's like diversifying your assets or paying your taxes. But if the people using the offshore bank are criminals, what do you think that says about the guy who founded the bank using the offshore bank are criminals, what do you think that says about the guy who founded the bank in the first place? It's 2008, and Jonathan Agnew is at Lorde's Cricket Grounds in London. It's one of the most famous cricket stadiums in the world.

Jonathan is in his late 40s, he's bald, and he wears thin oval glasses. Jonathan has covered cricket for the BBC for the last 17 years. Jonathan is in his late 40s, he's bald and he wears thin oval glasses. Jonathan has covered cricket for the BBC for the last 17 years, but today he's witnessing something he's never seen before. A black helicopter with gold trim is landing on the grounds. Lord's Cricket Grounds is a centuries old, members only establishment with a dress code and very particular rules. Non-members can't even walk on the grass,

much less land a helicopter on it. Jonathan is completely scandalized. The man who steps out of the chopper is a tall, tanned Texan who is definitely not a member. His name is Sir Alan Stanford, and he's made billions running an offshore bank in Antigua. Alan is in his late 50s with a mustache and slicked back hair. He's got brashness combined with a southern drawl

that makes him both intimidating and charming. Today, the charm seems to be winning out. To Jonathan's growing annoyance, the authorities of Britain's poshest sport seem happy to accommodate this guy and his untraditional arrival. Members of the English and Welsh cricket board rush to greet him on the field, along with some world-famous former cricket players. They're practically rolling out the red carpet for this VIP. Jonathan's already in a very British huff about this whole thing, but his jaw nearly drops as he watches Alan chest bump one of the British officials.

Then they all head inside, where a large plexiglass box is on display. In front of a gaggle of press and cameras, Alan shows off the contents of the box. Piles of $50 bills totaling $20 million. Check it out. Okay, Sarah, so this is a photo of a bunch of men standing in front of a giant glass case full of more money than I will see in my entire lifetime. And Sir Alan is there. He is very tall and he looks very similar to John Cleese. Yeah, it also is kind of like, wow, that's how much $20 million looks like. Yeah, it is a lot.

And I don't feel better by seeing how much it is. Well, Sir Alan has used his wealth to build hospitals and schools in Antigua. But the real pride of the island is Alan's cricket team, the Stanford Superstars. He's in London today to propose a one-off winner-takes-all contest between the Superstars and England's cricket team. He's using this eye-popping cash prize to muscle his way into the upper echelons of the sport.

And it works. England agrees to the match. Allen seems to have the cricket world wrapped around his finger. But Jonathan senses that something's off about this guy. And before long, he's proven right. Allen has gotten away with producing questionable returns from his offshore bank for nearly two decades, but the SEC and the FBI are closing in on him. And just months after Allen's audacious play

in the cricket world, he'll be caught up in a truly sticky wicket. The World of Junior T tennis is organized chaos. From executive producers LeBron James, Maverick Carter, and Sloan Stevens. These kids are four of the top junior players in the world. You have to keep pushing yourself to the limit. Let's go. This summer, Amazon presents Uninterrupted's Top Class Tennis, premiering on freebie and

prime video July 18th. From the This Is Actually Happening podcast comes the 82%, Modern Stories of Love and Family, a special six-part series focused on those who have challenged some of our deepest societal norms by reimagining what love and family can be. To listen to the 82% series, follow This Is Actually Happening

on the Wondery app or wherever you get your podcasts. From Wondery, I'm Sarah Hagge and I'm Saatchi Cole, and this is Scamfluencers. Come and give me your attention. I won't ever learn my lesson. Turn my speakers to 11. I feel like a legend. Sir Alan Stanford is easily one of the most brazen scammers

we've ever covered. With not much more than Texan audacity, he swindled his financial clients, the sports world, and a whole ass country. He spent billions on private planes, his own cricket grounds, and estates for his many girlfriends all over the world, and he evaded authorities for decades.

But when the financial market comes crashing down, Allen's scheme will be exposed and he'll be stripped of his knighthood, his fortune, and his freedom. This is Sir Allen Stanford, Lord of the Lies. Before Allen Stanford was transforming the cricket world, he was a young guy on the make in Waco, Texas. He comes from a family with decent means,

but he grew up next to neighbors with real wealth, the heirs to an oil fortune. And Alan becomes fixated on achieving it for himself. In 1975, Alan is 25 years old. He's a large guy, he's about 6'4", and weighs more than 300 pounds. He goes by the nickname Big Al. He and his wife, Susan, own He goes by the nickname Big Al.

He and his wife, Susan, own their own gym called Total Fitness Center. It's one of the first gyms in central Texas to have fancy nautilus weight machines, and Alan charges $1,000 a year for memberships. That would be nearly $6,000 today. Despite the outrageous fee, the gym takes off. Alan and Susan expand into bigger markets like Austin and Galveston, and these branches are hugely successful.

Alan buys a riverside house for him and Susan. He drives a white Jaguar around town. And then one day, he lands a helicopter on the gym's outdoor running track. It has the words, total fitness emblazoned on the side. This is the most American behavior I've ever heard. It has the words, total fitness emblazoned on the side. This is the most American behavior I've ever heard. Oh yeah, and the helicopter was leased. But it's a sign of what Alan really thinks is important,

making sure everyone knows he's crazy rich. And this being Texas, his fortune needs to be bigger and better than everyone else's. His personality is Texas-sized too. People who work for him later say he's arrogant and a tyrant. And Big Al is a big cheater too. An employee of his later told Vanity Fair that he had a girlfriend in every town.

But then, in the early 80s, an oil crash decimates Texas's economy. Not even Big Al can withstand this type of disaster. He's losing customers left and right. Before you know it, the out-of-business signs are up on total fitness' doors. Allen and his wife are now $13 million in debt and have to file for bankruptcy. But for Allen, this is just a temporary setback. He was taken down by forces outside his control, so for his next act,

he'll go someplace where he can make the rules. In the mid-80s, James Davis is working as an accountant for a refrigeration company in Michigan. Jim is in his 30s, and he's a soft-spoken, devout Baptist who served a six-year stint in the Navy. He seems like the complete opposite of Alan, and yet the two were roommates and best buds back in college. Can you read what an employee later said about Alan and Jim? Sure. They said, they were two cheesy mustaches going through the 70s. That is disgusting.

I don't like the words cheesy mustaches. Yeah, it's not the best image to think of, but I guess that was a lot of guys. I guess, but it sounds like two men I don't want to run into. Well, they gradually lost touch. Then, one day in December 1987, more than a decade after they graduated, Jim gets a call from Alan.

Alan says he started a new business and he could use some help. So a week or two later, Jim flies to Houston to meet up with his old pal. He's probably pretty impressed by Alan's upscale office with its marble floors, dark wood furniture, and 20 or so employees. And then Alan tells Jim all about his new venture,

Guardian International, an offshore bank he started in the Caribbean a couple of years earlier. It's headquartered in Montserrat, a British territory where offshore banking regulations are notoriously lax. It's a hub for international finance. Though the tiny island is only 40 square miles, it has more than 300 registered banks. Jim later says that Allen claims he got the idea to start his own bank from an ad

in an airline magazine. Offshore banks help people avoid taxes and offer extreme privacy, which makes them appealing to the uber wealthy or the super shady. In Allen's case, he's going after rich Latin American clients whose currency and political situations are pretty volatile. They want somewhere safe, secure, and secret to park their millions. Allen explains that by opening the bank in Montserrat, they aren't subject to income tax or U.S. financial regulations. That means they don't have to worry about pesky things like maintaining certain levels of reserve cash.

Instead, they can invest more of their clients' money and get higher returns. That must sound pretty good to Jim because he agrees to come on board. He even moves his family to Montserrat for a few months to get things off the ground. Then he moves back to the Houston office where Allen is based. Guardian, Allen's bank, offers one main product for investors, certificates of deposit or CDs. They're low-risk investments that are insured, like bonds, which makes them less risky than stocks.

But Guardian is offering to pay out at interest rates of 3 to 4% above what investors can find in the US. The deal's so good that by the time Jim joins, Guardian has sold around $14 million worth of CDs. Allen explains that he can offer such great returns because Guardian is a lean operation with just a few products. They have a small staff without as much overhead as other banks, and the fact that they're based in the Caribbean keeps the tax bill low. But Jim says that after just a few months on the job,

Allen starts asking him to lie and say Guardian is more profitable than it really is, so they can attract more customers. And Guardian really needs to get new people coming in. Because the truth is that Alan's actually operating an elaborate international Ponzi scheme. He's using new clients money to pay older clients super high returns. Sarah, I think you and I both know that this always works and nobody gets caught when they do this.

It's a great way to set up your finances so that you're always stressed out, you're always in debt, and you're never actually as rich as you think you are. I don't know why you and I haven't started doing this yet. Yeah, I know. And Jim agrees to lie on the financial statements. It's unclear if he knows the full extent of what Alan's doing, but it seems like it should have been easy to guess. And given the minimal regulatory oversight, they both probably assume no one's going to question the bank's methods.

So Allen and Jim keep recruiting new investors and selling CDs like hotcakes. By 1990, two years after Jim joined Allen, they claim that Guardian has $100 million in its accounts. But their luck is about to change. Regulators on Montserrat are taking a closer look at Guardian and Allen himself. They're under pressure from the UK government to pare down the number of offshore bank licenses, and they send a letter saying they discovered Allen's previous bankruptcy when he had to shut down his chain of gyms. They use that as their reason to revoke Guardian's license.

Allen says they have no choice but to pick up and move before the whole scheme unravels. Guardian Bank Island hops about 35 miles northeast to Antigua, and Allen rebrands it as Stanford International Bank. The bank may have changed islands and names, but Allen is still running the same old Ponzi scheme. Stanford International Bank. The bank may have changed islands and names, but Allen is still running the same old Ponzi scheme. And he runs it with an iron fist.

Jim says Allen's leadership style is to be feared rather than loved. He controls his underlings through a toxic combination of flattery, intimidation, bribery, and angry outbursts. As a controller for Stanford International Bank, or SIB, Jim is signing off on documents that claim he oversees the investment portfolio. Only he's not.

Jim later says Allen's the one who knows where all the client's funds are invested. Allen just gives Jim verbal updates and promises to share the actual statements, eventually. In the meantime, they need to give the regulators some basic info. So Jim takes Alan at his word, using investment numbers he can't verify

to fill out financial statements. It's pretty clearly illegal, but Jim chooses to believe Alan's promise that all the money is really there. A year later, Jim gets called into Alan's office in the Houston branch. Alan wants him to fly all the way to London to send a fax. Alan says it has something to do with the company that insures their CDs.

Alan and Jim have been telling investors that their CDs are insured by British Insurance Fund, which is based in London. But now, Alan tells Jim that they might have been stretching the truth a little. Can you read what Jim later testifies that Alan told him about British Insurance Fund? Sure. He said, OK, so it's not a real insurance company then at all. No, it's not at all. We don't know exactly what Jim's thinking at this point,

but Alan tells him he's the only one he trusts. So Jim hops on a plane and goes to the London company's address, an office building near Piccadilly Square. And when he gets there, he sees that the company is nothing but a chair, a desk, and a fax machine squeezed into a tiny cubicle. And the document Jim's supposed to fax? It's a letter assuring a potential S.I.B. client that the British Insurance Fund is a real insurance firm, and it's backing S.I.B.'s investments, which Jim now knows is a lie.

Jim later says he had suspicions for years, but this is the moment it dawns on him. The whole operation is a fraud. And yet, Jim decides to stay quiet. He later says he wanted to please Alan and that he was a coward. Pretty devastating to self-refer as a coward when the dust has settled. And personally, hearing someone say that

is kind of disgusting. Yeah, I'm not rooting for you just because you know that you suck. Well, Alan rewards Jim's silence. He's promoted to CFO of the company. And the next year, he's also added to the cozy group of family and friends who make up Alan's board of directors. Jim's made his choice.

At this point, he's a willing accomplice. There's nothing to do now but double down and hope Alan can figure out a way to make his business legit. For the rest of the 90s, Alan grows his bank and his connection to Antigua. There's one incident in particular that cements him in Antiguan legend.

In 1998, around Easter, a local Catholic priest starts bleeding from wounds on his hands, feet, and sides. The same wounds Jesus suffered when he was nailed to the cross. Allen claims that he carries the priest to his car and has him flown to New York on his private jet to be treated by church specialists. Afterward, Allen walks around carrying a vial of fluids drained from the priest's foot as a memento of the occasion. I hate you for telling me that. Yeah, I hope you never forget it.

How could I? Alan's involvement with the priest shows the Antiguan people just how rich and powerful he is, and theoretically, how devoted he is to the country and its people. About a year later, Alan becomes a citizen and starts offering his financial support. Antigua has trouble getting loans because of its history of corruption.

But Allen and SIB are happy to help. They loan the government about $65 million for projects like a better hospital and new government office buildings. Allen also starts buying up the island's major institutions for his own personal gain. He purchases the Bank of Antigua for somewhere around $11 million. Then he acquires a local airline, Caribbean Star. And he takes over Antigua's biggest newspaper. He becomes the largest private employer on the island.

All of Allen's acquisitions are being paid for with his customers' money. By 2002, S.I.B.'s assets have grown to $1.7 billion. And just in case he doesn't already have enough influence, Allen makes a powerful new friend, Leroy King. Leroy is in his 50s with a round face and close-cropped hair. He's a former executive of Bank of America in New York and Antigua's former ambassador to the United States. phase and close-cropped hair. He's a former executive of Bank of America in New York and Antigua's former ambassador to the United States. In 2003, Leroy becomes the head of Antigua's financial

regulatory arm. That means he's responsible for overseeing S.I.B.'s investment portfolio, including reviewing financial reports. And around then, Alan and Leroy deepen their friendship. They stage a blood oath ceremony, binding them together as blood brothers. This is a very fluid, heavy episode,

not thrilled about that. I am a little wigged out by these guys like forming such a close bond over a Ponzi scheme. Yeah, they've really decided to be best friends and blood brothers in fraud. And after making this oath, Allen and Leroy start doing each other favors. Allen pays Leroy more than $200,000 in cash bribes. He also gets Leroy fun perks like tickets to two Super Bowls.

In exchange, Leroy makes sure no one looks too closely at S.I.B.'s inner workings. In fact, when two Antiguan regulators start questioning S.I.B.'s financial statements, Leroy allegedly reassigns them somewhere else. Leroy even runs interference for Alan from the SEC. When officials reach out to him in 2005, Leroy goes right to Alan. And Alan helps Leroy write a response that says S.I.B. is totally fine. And if it was a Ponzi scheme, the authorities in Antigua would have detected it. And Leroy isn't the only person helping Alan stay out of trouble.

He's also hired lots of former SEC and law enforcement officials who've helped him dodge investigations for years. Alan's doing a good job of hiding all the red flags, but he makes the big scammer mistake of getting a little too greedy. When SIB starts expanding, they hire tons of new workers. And some won't be as willing to look the other way. For more than two centuries, the White House has been the stage

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you get your podcasts. You can listen to This Is Actually Happening ad-free the Wondry app or wherever you get your podcasts. You can listen to This is Actually Happening ad free on Wondry+. In the mid-2000s, Allen recruits a ton of new financial advisors to join the company and offices all over the US. For these new advisors, there are some great perks. For starters, they earn a 1-2% commission on the CDs they sell, which is more than the industry standard, plus bonuses for hitting higher marks. The CDs are so profitable for advisors that, internally, they refer to the money they rake

in as bank crack. Plus, the advisors can use the company's fleet of private jets and win luxury cars or outselling their coworkers. In 2005, Charlie Rall and Mark Tidwell joined the bank. Charlie and Mark are middle-aged financial advisors who look like if Dick Wolf was two dudes, Dick and Wolf. They both liked the idea that Alan's operation is leaner

and more efficient than most banks. Sure, there's an offshore portion of the business, but that's pretty normal for any firm that handles wealthy investors. So they sign on and they bring their long list of clients with them. Charlie and Mark steer many of their customers towards SIB's phenomenally well-performing CDs,

but it doesn't take long for doubt to creep in. Pretty soon after joining, the guys start to worry that they've made a huge mistake. Some of Mark's clients get letters from the SEC. Turns out the agency is on the hunt for information about how S.I.B. is promoting and selling their CDs. Mark and other advisors are called into a meeting to talk about what's happening. S.I.B. management says that this is just a routine SEC review of their marketing materials, and they're bringing in a major law firm to handle things.

And it seems to have worked. After about a year, things calm down. Charlie later says Allen told advisors that the SEC was satisfied with their process and that everything's fine. But despite all the assurances, Charlie and Mark just can't shake the sense that something is off with their employer. For now, they're along for the ride. But soon, the company perks will get too over the top and they'll be forced to choose between sailing out

on golden parachutes or blowing the whistle on the whole scheme. Around this time in the mid 2000s, Alan throws yet another over the top party for his best salespeople. He's taken over a hotel ballroom in Manhattan and transformed it to recreate Studio 54. There are women riding on white horses and go-go dancers in cages. Grace Jones and Andy Warhol impersonators are on the dance floor. There's even a performance from some members

of the Village People. The prize tag for this blowout rager is allegedly $25 million. I did not know that the Village People commanded such a feat. Good for them. The Village People budget was about $20 million. It was $20 million for the village people, $5 million food and drink.

Yes. Got it. Absolutely. And of course, Alan's not just throwing money at parties. He's got multiple corporate jets that have the S.I.B. logo of a golden eagle etched on to everything, including the toilet seats. He gives millions to political candidates in the US,

basically anyone in a position to vote on offshore banking rules, regardless of what party they're in. And he's taken about $2 billion in personal loans from the company. Some of his exploits sound like jokes from the most interesting man commercials. He once spent $12 million to lengthen his yacht, the Sea Eagle, by six feet. He also sued a New York school principal for calling him a neocolonialist, and he created his own cricket team and built them a stadium. Then there's the women in his life, you know, the ones other than his actual wife.

He buys one mistress a 10.5 million dollar estate in Florida. It's a five-story, 24,000 square foot mansion that sits on three acres of land. It has a hunting lodge, more than 500 feet of waterfront, and an English country style pub. And Alan fathers at least five children by three women other than his wife. And all of these kids are living in style. He pays hundreds of thousands of dollars a month

in spousal and child support payments. I mean, at least he's paying it. Honestly, true. And in 2006, he's knighted by the government of Antigua. He's now Sir Alan Stanford, thank you very much. But at the same time Alan's getting knighted, his employees are growing more and more concerned. Alan's cartoonishly lavish lifestyle draws a lot of attention.

He believes he has everything under control and that nothing can bring him down. But there's a mutiny brewing inside his bank. In June 2006, S.I.B.'s financial advisors, including Charlie and Mark, are told to get rid of any documents and client files that aren't on official Sib letterhead. That means any client notes, interoffice emails, and even post-it notes. Management wants them to destroy them all.

Charlie and Mark are worried that something illegal might be happening. They voice their concerns, but they're brushed off. Almost a year later, management calls another meeting and tells advisors to stop putting their concerns in emails. One supervisor reportedly says, I just don't want the SEC or someone to pull that out and go, what in the world's going on? Yeah, I think anytime you have a healthy fear of the SEC, there's probably a few things going on. Yeah, there's probably a few things going on.

Yeah, there's probably a reason. And it turns out regulators are already on Alan's doorstep. A few months after the don't put your doubts in writing meeting, Charlie and Mark learned that their boss has to pay a $20,000 fine to FINRA, another US financial regulator, for not clearly stating some risks involved

in their CD offerings. Charlie and Mark are starting to panic. They know something sketchy is going down and they need to get themselves and their clients out before things get worse. A month later, in December of 2007, Mark's supervisor Jay Como calls him into his office. Jay's heard that Mark is thinking of leaving. Mark confesses that he is. He just has too many concerns

about the company's shady dealings. A few days later, Charlie follows suit and tells Jay that he also plans on resigning. Jay asks him to put his resignation in writing. Charlie's like, I don't think you want me to do that, but sure. He drafts a resignation letter with his lawyer, listing out all his concerns.

He includes the fact that advisors were asked to destroy documents during an ongoing SEC investigation. Charlie gets a letter from Jay in reply and opens it while getting ready to host a Christmas party. It says that, actually, he hasn't resigned. He's been fired. After that, actually, he hasn't resigned. He's been fired. After that, all hell breaks loose.

Charlie and Mark are locked out of the office and their work accounts are frozen. SIB sues them both for the return of their signing bonuses. Charlie and Mark then counter sue, claiming they were forced to commit illegal acts on behalf of the company. The whole time, SI. management is telling other advisors that Charlie and Mark are just disgruntled employees whose claims are totally without merit. For some reason, I feel like that education campaign against Charlie and Mark won't work.

Oh yeah, Mark and Charlie have proof on their side. They've been putting together a dossier of all of the questionable S.I.B. tactics they came across, including marketing materials that imply CDs are insured when they're not, and evidence that S.I.B. is lying about the performance of mutual funds. Charlie and Mark know they need to hand deliver their documents to the SEC. They decide to take them to the offices in Fort Worth, Texas,

a four-hour drive from Houston. But they're paranoid that Allen and his cronies are on to them, They decide to take them to the offices in Fort Worth, Texas, a four-hour drive from Houston. But they're paranoid that Allen and his cronies are onto them, so they decide to take separate cars and separate routes. The drive is tense. Both men constantly check their rearview mirror, making sure they're not being followed. Until finally, they both arrive at SEC headquarters

and make the drop. They've done all they can. But while Charlie and Mark have prepared for the possibility of retaliation from Allen, no one is ready for the biggest curveball in the case, a market collapse. In the fall of 2008, independent financial adviser Alex Dalmati is watching the global financial system collapse from his home office in South Florida. Alex is in his late 40s with dark hair and an ever-present 5 o'clock shadow, and he's probably getting a lot of panicked phone calls.

One friend's financial quagmire sparks a particular interest. This friend has a lot of money in S.I.B. and he wants Alex's opinion on whether his money is safe with the bank. Alex agrees to help and starts examining S.I.B.'s public financial numbers. Alex sees that around this time, Forbes estimates Allen's net worth is about two point two billion dollars and that he's jumped to number two hundred and five on their billionaire list. He's also been chosen as World Finance magazine's Man of the Year. In a glowing profile,

he talks about minimizing risk while maximizing returns. This is also when they hold the cricket match with the $20 million prize. He causes a scandal when he's photographed cavorting with several of the English cricketers' wives and he has to publicly apologize. Also, S.I.B. hasn't been caught up in the subprime loan disaster that tanked so many big banks. When Alan is invited on CNBC to talk about how he avoided that, he just says S.I.B.

avoids risks they don't understand. Oh, and he also gives this little quip. Before we let you go, is it fun being a billionaire? Well, yes, yes, yes.

I have to say it is fun being a billionaire. But it's hard work. I'm relieved. I was worried it was all work and no play for the obscenely wealthy amongst us. I know. I'm really happy that they do take the time to have fun. What a relief.

When Alex starts digging into SIB itself, what he finds absolutely blows his mind. In nearly every year of the bank's existence, it has reported investment gains between 10 and 16%. That's really high and suspiciously consistent. By this time, banks have turned in results for the first half of 2008, and everyone is posting losses from the months leading up to the stock market crash.

Except S.I.B. Here's Alex talking about what he found years later on Bloomberg's Odd Lots podcast. The biggest warning sign was the business model itself. So I just told my friend, you know what, get out as soon as you can. Alex thinks there's no way SIB is legit, so he decides to write a report. In January 2009, he publishes his findings in a Venezuelan financial magazine.

He says Allen's bank is a sham, and its returns are, quote, "'on the limit of the credible universe.'" Oh, and his report comes out just after the mother of all financial scandals is exposed, Bernie Madoff's Ponzi scheme. Financial blogs start to pick up Alex's story, and soon news organizations like Businessweek and Bloomberg follow.

What Alex doesn't know is that behind the scenes, the Bernie Madoff arrest has shocked the SEC into action, and they are getting ready to pounce. SEC into action, and they are getting ready to pounce. The world of junior tennis is organized chaos. I really love that element of being by yourself out there. Even if you don't want the pressure, it comes with it. If I'm not hard on myself, how am I gonna succeed? From executive producers LeBron James,

Maverick Carter, and Sloan Stevens. These kids are four of the top junior players in the world. You have to keep pushing yourself to the limit. That's so hard on your body. The hardest part is finding those times to be a normal kid. You know, instead of going to prom, I was playing the junior French Open. It's a lot of sacrifice.

Schoolwork. Friends. Sleep. This is not normal life. You have to really love this. If I can control my anxiety, I could come out on top. It's all on you. All the work you're putting in to be a pro. How bad do you want this?

I'll basically play until I drop. Let's go. This summer, Amazon presents Uninterrupted's Top Class Tennis. It's going pro or nothing. Premiering on freebie and prime video July 18th. I feel like a legend. As Alex's article is gaining traction, some of S.I.B.'s top executives are huddling at the company's Miami office.

The bank's chief investment officer, Laura Pendergast-Holt, is leading an emergency meeting. The SEC has subpoenaed many of Allen's executives by this point, and in a few days, they're gonna depose Laura too. They want to confirm that S.I.B. and its CDs are actually real, and that client money is actually being invested the way

the bank's documents claim. So Laura's sharing some information to help the execs prepare for their interviews. Allen and Jim have politely declined their SEC subpoenas, and they should probably be leading this meeting too. But Laura's proven to be a reliable foot soldier, so they're leaving it to her. Laura's in her mid-30s, brunette and very tall. She's also incredibly inexperienced for the position she's in.

She started working at SIB right after college because she knew Jim from church. Though she has a math degree, she's never worked as an analyst or interned anywhere even near Wall Street. But she's been at SIB for more than a decade and she's worked her way into the inner circle. Actually, Laura and Jim had a brief

affair a few years ago. She knows at least some of the ins and outs of the scam and hasn't kicked up any fuss. He's so lucky that she's keeping her mouth shut because I don't think I would. No! And at the meeting, Laura is explaining to the execs exactly how S.I.B.'s portfolio works. About 20% of the bank's funds are held in cash or mutual funds. But the vast majority of it, about $7 billion, is in quote unquote, other assets. She says that real estate is a big chunk of the so-called other assets. Another chunk has been loaned to Sir Alan himself. And the rest, about $2.5 billion,

is missing. The execs realize they are, to put it lightly, fucked. By this point, SIB has sold so many CDs that they are liable for more than $8 billion to their 30,000 clients. The business has boomed for two decades because money keeps coming in, and most customers take their profits and roll them into more CDs. But that changed when the stock market crashed. Investors have been asking for their money back en masse, causing a run on the bank. The execs understandably have a lot more questions for Laura. Questions that she is not really qualified to answer.

So they hold more meetings over the next couple of days, which Alan finally shows up to. At one point, as his executives threaten to turn on him, Alan allegedly slams his fist on the table and shouts, the assets are there. At another moment, one executive starts crying. He threatens to go to the authorities if Laura reveals anything more he didn't know. The bank's attorney walks over and puts a comforting hand on his shoulder and suggests they start praying. I think that'll work.

Do you know who loves Ponzi schemes? God, he loves them. Well, days later, Laura is ready to go into the SEC's offices in Fort Worth to provide sworn testimony. That morning, she gets a call from Jim. He says she should lie. And she does.

Laura doesn't mention preparing with Alan, Jim, or anyone else. And she denies knowing anything about the allocation of assets. But while Laura might be loyal to SI.I.B., her boss is anything but. One week after Laura's deposition, the SEC freezes the bank's assets and raids its Houston offices. They believe Alan's a mastermind behind a multi-billion dollar Ponzi scheme

affecting tens of thousands of investors. They charge Alan, Jim, and Laura with running an $8 billion fraud, but it's civil, not a criminal charge. Two days later, Allen attempts to flee the US by chartering a plane from Houston. But the pilot won't take Allen's credit card. So instead, he takes a regular flight to Virginia,

like a peasant, to stay with one of his girlfriend's families while law enforcement slowly gets their shit together. One night, about two months later, Alan's out at a restaurant when he's cornered by an ABC News reporter. They say that you promised more than you could possibly deliver with your seedings.

It was a made-off white scam. Baloney, baloney, it's no Ponzi scheme. It's a Ponzi scheme. Why are they finding billions and billions of dollars all over the place? Baloney, baloney. I'm going to start saying baloney. I should be like, that's baloney, man.

I love that. Allen goes on to say that the government's got it out for him because he's a, quote, maverick rich Texan. He also complains about having to fly commercial now that his planes have been seized. And when the reporter asks if SIB was laundering money, Alan threatens to punch him in the mouth. Meanwhile, Laura gets charged for lying to the SEC. Jim lawyers up and almost immediately starts

cooperating with the government, negotiating a plea deal and turning on his old friend. And finally, about four months after the SEC filed its civil case, Alan turns himself into the FBI. He's arrested on 14 counts of fraud, destruction of a federal investigation, and conspiracy to launder money. He pleads not guilty. Alan tries to pin everything on Jim. He says that Jim was the one who oversaw the investment portfolio. Jim was

the one with the investment committees, and Jim was the one who oversaw the investment portfolio. Jim was the one with the investment committees, and Jim was the one who the Chief Investment Officer reported to. Allen can point the finger all he wants, but Jim's not about to take that line down. Three years after the SEC raids the S.I.B. offices, Allen finally stands trial. And Jim Davis, his trusted CFO and old college roommate, is the star witness against him. Jim's life has changed drastically. He's in his mid-60s now, and his hair has turned completely white.

Though he says he earned $14 million from SIB over the course of the entire scheme, his lawyer claims he's lost almost all of it. He's relegated to doing bookkeeping for a fruit storage company in Michigan. Jim's attorney says he's, quote, devastated because he knows a lot of good people got hurt. As for Alan, he's almost unrecognizable. He was declared a flight risk, so he's been held in prison without bail. And once inside, he got in a fight with another inmate

over using the phone. The bra left him with two black eyes, a broken nose, and a concussion. Afterward, he appeared to suffer from a bout of amnesia. His lawyer claims that the assault, paired with a strong anxiety medication prescribed in the aftermath, has affected his ability to defend himself.

This is some really convenient timing for a lot of these physical maladies, it seems. Yes, very convenient. But in December 2011, the court deems Allen fit to stand trial in Houston. He's 62 years old and facing the possibility of spending the rest of his life behind bars. Jim tells the court that Allen's bank was a scam

from the very beginning, and that he'd constantly warned Allen that the Ponzi scheme would fall apart one day. Jim claims that Allen emotionally bullied him into lying to investors. The trial lasts about six weeks. Allen chooses not to testify to defend himself. His only hope is that his lawyers have convinced the jury

that Jim Davis is really the mastermind behind everything. The jury takes three days to deliberate, and in the end, they don't buy Allen's story. They find Allen guilty of 13 of the 14 charges against him. After the judgment, Allen finally decides to make his own statement. He says he's not a thief, and it's all the government's fault that people lost their investments. If they hadn't falsely accused him of fraud, there would have never been a run on his bank and his clients investments wouldn't have been sold off at bargain basement prices. I love this argument. He is effectively saying had he not

been caught doing fraud, then nobody would know he had done the fraud, everybody would have somehow gotten the money that he got through fraud. It's seamless. Exactly. It's like, you should have just let me continue doing the fraud. And during Alan's sentencing, prosecutors asked for the maximum of 230 years.

A few victims stand up to speak about what they went through. One man calls Alan a dirty, rotten scoundrel. Because of Alan, he says he lost everything and couldn't afford to pay for his autistic grandson's medical treatment. Another woman says three generations of her family lost over $4 million to what she called Alan's financial terrorism. She asks all the victims in the courtroom to stand so Alan can see them. Alan turns in his chair and reportedly stares them all down,

seemingly without an ounce of remorse. Ultimately, the judge sentences Allen to 110 years in prison without parole. In contrast, Jim faced up to 30 years, but after pleading guilty and negotiating a deal, he's only sentenced to five. Unlike his former friend, Jim says he'll feel remorse and regret for the rest of his life. Laura pleads guilty to obstruction of justice,

and as part of her plea agreement gets three years in prison. Laura was released from prison in 2015, and Jim was released in 2017. To this day, Allen continues to file appeals from his jail cell in central Florida. His latest appeal was denied in 2023. Sachi, has your opinion on banks and banking changed at all after this story? No, I'm still perplexed and confused by how banks work, even when they work appropriately, even more perplexed when they are in the scam space. Yeah, it really makes me scared to think of like how many normal people are like, well,

I'm putting my money into this and it must be safe. I mean, obviously, hashtag not all banks, but it is pretty crazy when you think of how trusting we are with these institutions. It's also interesting that the guys who did this scam really thought like, hey, if you just left us alone, everybody would have gotten their money and it would have been fine. Yeah, it's very funny to think like, hey, we actually had this Ponzi scheme under control. We were going to pay everyone off, but you ruined everything. It's like when somebody gets caught in Scooby-Doo and they're like,

I would have gotten away with it if it weren't for you meddling kids. And you're like, is the issue that the kids were meddling or is the issue that you were dressed up like a ghost trying to scare a bunch of 16 year olds and their dog and maybe doing murder? I don't know, I didn't really watch that show. I mean, listen, you've got it right.

Okay, thank you. That is how it worked. You know what? The island of Antigua is one of the realest victims in this story. You know, he basically pulled a colonizer move, went there, put them in a position where they kind of like needed him and his money, turned into a sir there, and basically screwed them over because it was all a scam. It's weird to compare this to like Fire Festival, but I feel like for most people, this is like the best example of a white guy

who comes in and pulls all of these schemes and mostly rips off like a lot of other rich people, semi-rich people, but like the real scam is on the ground. It was the people who were working Fire Festival, who lived on the island, who did not get paid, who they had provided their services. And I guess in that way, the real people who got scammed are people who just lived there and thought that this guy was maybe going to bring something. Yes.

And he didn't. All he did was take. This takes me to my next point, which is like one of the most annoying things rich people do. They think providing money to under-resourced public services, like hospitals or schools or whatever charitable donations, it kind of absolves them of having to care about anything in the world and actually care about people. And it's like, yeah, if we were going to evaluate things that way, me giving like a hundred and something dollars to something

is a lot more money than a multim-millionaire or billionaire giving like a hundred thousand dollars. You know what I mean? It's like, I'm supposed to feel like this is a good thing just because they gave an amount of money that they shouldn't even have. It pisses me off. I hate philanthropy. I hate how it washes people of their crimes and he obviously just wanted to be the king of Antigua and it worked out for a little bit, but he's in prison now. I'm not happy with how many fluids are loose

and then being contained in other vessels in this story. Yeah, I'm not into the blood oaths. Let's never do one. What if we just spit in our hands and shake on it? No, I'm not tying myself to you any further than we already tied. Too late. Every time we shake hands, Sarah, I have spit in my hand.

I hate you. If you like Scamplincerz, you can listen to every episode early and ad free right now by joining Wondry Plus in the Wondry app or on Apple podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey at Wondry.com slash survey. This is Sir Alan Stanford, Lord of the Lies. I'm Sarah Hagge and I'm Sachi Cole.

If you have a tip for us on a story that you think we should cover, please email us at scamfluencers at Wondry.com. We use many sources in our research. A few that were particularly helpful were Texas Monthly's The Dark Knight by Mimi Swartz, Vanity Fair's Pirate of the Caribbean by Brian Burrow, American Greed's Alan Stanford, The Dark Knight,

and the BBC's Sports Strangers Crimes, The Man Who Bought Cricket. Alex Burns wrote this episode. Additional writing by us, Sachi Cole and Sarah Hagge. Eric Thurm is our story editor. Fact checking by Meredith Clark. Sound design by James Morgan. Additional audio assistance provided by Adrian Tapia.

Our music supervisor is Scott Velasquez for Freesan Sync. Our managing producers are Desi Blaylock and Matt Gant. Janine Cornelow and Stephanie Jens are our development producers. Our associate producers are Charlotte Miller and Lexi Peery. Our producers are John Reed, Yasmin Ward and Kate Young. Our senior producers are Ginny Bloom and Sarah Enni.

Our executive producers are Jenny Lauer Beckman, Marshall Louie and Erin O'Flaherty for Wondery. Hi, I'm Jesse Tyler Ferguson, host of the podcast Dinners on Me. I take some of my favorite people out to dinner, including, yes, my modern family co-stars, like Ed O'Neill, who had limited prospects outside of acting. The only thing that I had that I could have done was organized crime.

And Sofia Vergara, my very glamorous stepmom. Why do you wanna be corruptible? Or Julie Bowen, who had very special talents. I used to be the crier. Or my TV daughter, Aubrey Anderson-Emmons, who did her fair share of child stunts. They made me do it over and over and over. You can listen to Dinners on Me wherever you get your podcasts.