Stanford Financial Has Deep Venezuelan Ties
CNBC Chief International Correspondent
Big connections between Stanford Financial and Venezuela.
My sources in Venezuela tell me that Stanford Financial, the finance firm in the crosshairs of the SEC, has big connections with Venezuela. In fact, this morning regulators say Venezuelan exposure totals $2.5 billion.
A very senior executive in the country tells me R. Allen Stanford used to send a private jet to pick up his biggest Venezuelan clients and bring them to swanky parties he held.
Back in 2005, despite a wave of corporate nationalizations under Socialist President Hugo, Stanford Financial Group opened a dozen branches in Venezuela. You can see the article here from the NY Times.
You have to wonder, why? Perhaps to legitimize the company to wealthy clients with big pockets and who were working on ways to hide their money from socialist president Hugo Chavez?
In fact, it was a Venezuelan economics magazine, VenEconomia, that first sounded the alarm about Stanford Financial. If you speak Spanish you can read about it here but a good explainer in English is here.
As for the thousands of small depositors who had their money in bank accounts in Stanford in Venezuela--they may actually be OK.
The capital controls put in place by Chavez would mean any deposits Stanford took in, couldn’t be taken out of the country. It’s a frustration for many American corporations doing business there—they can’t repatriate profits.
That is unless Stanford had some kind of deal with the Venezuelan government. The tentacles of this alleged case of fraud could be long and run very far south.