Despite the protestations from Dr. Errol Cort, personal attorney for R. Allen Stanford on Antigua, former Attorney General and former Finance Minister of Antigua and Barbuda, former World Bank signatory, current unseated representative and present Minister of National Security, the latest Financial Regulator in Antigua, Leroy King, has been summarily sacked.
However, it took an indictment handed down against Leroy King in the US and extradition requests by the US for him to stand trial, for the sacking to take place.
Even with pleas to the contrary, the indictment could not have been a total surprise for the Government of Antigua. In fact, at the time the Stanford scandal broke into the international media arena, the Government of Antigua sent King off to enjoy months of accumulated paid vacation time.
The two events were treated as unrelated. The expectation was that the matter would blow over without involving anyone on Antigua. After all, history has shown an extraordinary and consistent lack of consequences to transgressions by Antiguan Government officials against their own people and the international community.
On the other hand, Antigua's current Attorney General, Justin Simon, Q,C., is now suggesting that the vacation was intended to give the Ministry of Justice (of which Simon is also the head) time to review the regulatory process.
Given R. Allen Stanford's free-style business practice and the number of business ventures set up by him with Antigua as their home base, regulators in any prudential jurisdiction would have been very concerned by a single shareholder owning and controlling all of them.
If further indication of free-wheeling was required, the fact that these corporate sandcastles were also audited by a single individual should have been more than adequate cause to raise an alarm – quite some time ago.
On 17 July 2009 AG Simon announced the appointment of Althea Crick to chair the Board of Antigua's Financial Regulatory Authority. He introduced her as having led the country's financial watchdog "until Mr. Stanford may have influenced her removal."
This is not the first appointment to head the Financial Regulatory Authority since the dismissal of Leroy King. The Country Manager for the Antigua Barbuda Investment Bank and President of the Antigua Chamber of Commerce, Everett Christian, was first appointed to replace King. He opted out several days after his term began on 1 July 2009, claiming potential conflict of interest because his wife works at an offshore bank.
Not much is known about Althea Crick, except that as a CPA she was a former employee of Price Waterhouse. She never occupied a leadership position with the Financial Regulatory Authority.
No suggestion has been made regarding any means and by what ministerial mandate Stanford's "influence" was played out in Ms. Crick's earlier dismissal from the Financial Regulatory Authority.
"May have" is conveniently vague for casting suspicion without requiring proof.
Finding a single scapegoat and pinning every problem, conceivable or otherwise, on that individual is a technique that can be traced throughout Antigua's pock-marked history.
It is inevitably accompanied by expressions of shocked surprise.
So it is that, while promising a "rigorous" domestic investigation into the Stanford case, AG Simon also said he did not believe any new legislation was required to prevent fraud.
"We are satisfied and confident in respect of our legal framework.... What has gone wrong is the execution by a particular individual," Simon said.
Not everyone agrees with that position.
On July 13, 2009, a group of seven investors from the United States and Latin America filed a class action lawsuit against the Government of Antigua for its part in Stanford's alleged fraudulent investment scheme.
The Stanford International Bank (SIB) investors want at least US $8 billion in damages, the amount Stanford is accused of stealing from investors, but this could triple under US racketeering law.
In its press release, the Stanford Victims Coalition (SVC), an international advocacy group, acknowledged that Stanford Victims realise Antigua cannot raise the US $24 billion claimed by them in restitution and damages. However, it is urging the US, along with the governments of the other 60 countries, whose citizens have fallen victim to the alleged Stanford fraud, to establish a recovery fund through loans from these governments, the IMF, the Eastern Caribbean Central Bank, CARICOM and other entities.
"It is time for all of our governments to come together and hold Antigua accountable for what has allegedly happened under their watch and force them to address the devastation they have contributed to," said the SVC.
Continuing, the SVC claimed that some of the US $8 billion which the financier allegedly swindled from them and other investors was used in the development and operation of the V.C. Bird International Airport, the new hospital known as the Mount St. John's Medical Centre, writing off Government debt and providing loans to the Government.
"Antigua is sovereign, but not above the law. It became a full partner in Stanford's fraud and reaped enormous financial benefits from the scheme. Stanford stuffed Antigua's coffers and its officials' pockets with money stolen from unsuspecting customers throughout the United States, Canada, Central America, South America, and elsewhere," the complaint filed in Houston, Texas stated.
U.S. District Court Judge David Hittner issued an order saying he will allow "thousands of potential victims, throughout the world" to speak to the court or submit written statements before he accepts a plea agreement in the case brought against James Davis, the ex-chief financial officer of the Houston-based Stanford Financial Group.
Meantime, in a response dated 15 July 2009, AG Justin Simon announced that the Government of Antigua will "vigorously defend itself against a multi-billion-law suit filed by Stanford investors" and that "it comes as a surprise and has serious implications for the country."
By including the Eastern Caribbean Central Bank and CARICOM, the Stanford Victims Coalition has brought into focus the extended responsibility of the Caribbean financial community, which has been quick to "save" Stanford's local Bank of Antigua, by divvying it up between its members, but has remained remarkably silent on the circumstances surrounding the Stanford indictment.
According to a State Department report in 2007, Antigua and Barbuda "remains susceptible to money laundering because of its offshore financial sectors and Internet gaming industry." It noted that, at the time, Antigua had 17 offshore banks, three offshore trusts, two offshore insurance companies and 23 licensed Internet gaming companies.
Investigators and potential investors may wish to consider who appoints Regulators in the Caribbean, who gains from misrepresentations to investors and whether other sounder governments and regulators should be held responsible for turning the blind eye to a situation which has existed for a long time.
It is easy to pretend that an individual such as King acted alone. The reality is, however, that decades of unchecked corruption and systemic malgovernance continue to provide fertile ground to attract a string of "stanfords" and allow them to survive and prosper in Antigua.
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