Stanford found guilty of $7billion fraud

One of the most embarrassing misjudgments in the history of English cricket has ended with Allen Stanford, the disgraced Texan financier, being found guilty of a multi-billion dollar fraud

David Hopps
David Hopps
Allen Stanford arrives at the Bob Casey Federal Courthouse in Houston, where he will be tried for fraud, Houston, Texas, March 5, 2012

Allen Stanford arrives at the courthouse in Houston where he was found guilt on 13 counts of fraud  •  Getty Images

One of the most embarrassing misjudgments in the history of English cricket has ended with Allen Stanford, the disgraced Texan financier, being found guilty of a multi-billion dollar fraud.
Stanford, who has been found guilty in a Houston court on 13 out of 14 charges, including conspiracy to defraud, was once fondly viewed by the ECB as the great benefactor of English cricket, a tycoon who would single-handedly counter India's growing domination since the launch of IPL.
Sentencing is not expected for several months and Ali Fazel, Stanford's attorney, indicated that his client could yet appeal. Stanford, 61, could face up to 20 years in prison.
The ECB have made no immediate comment on the Stanford verdict, having been painfully aware for several years that they unwittingly benefited from the proceeds of a fraudulent operation that has left an estimated 20,000 investors, primarily from the Caribbean and USA, facing heavy losses.
Stanford - Sir Allen no longer after Antigua stripped him of his knighthood - was found guilty of running a Ponzi scheme over the past two decades, a fraudulent investment scheme that provides returns to investors from their own money and from deposits provided by subsequent investors, rather than profits earned by the company.
The proceeds were used to fund Stanford's garish lifestyle: a 112-foot yacht, Sea Eagle Bikini; a mansion complete with moat in Miami; a private jet and, famously in the case of English cricket, a helicopter that landed on the outfield at Lord's in June 2008, whereupon Stanford emerged with a perspex case holding $20m in banknotes to promote a winner-takes-all game between the Stanford Superstars and an England X1.
The stunt was widely condemned by many as one of the tackiest moments that English cricket had ever seen, even before details of Stanford's business dealings began to emerge.
The ECB regarded him a perfect ally as they envisaged a Caribbean Twenty20 tournament that would build a strong new alliance with West Indies cricket. There were plans, too, for Stanford to become a major sponsor in a relaunched county T20 competition, so protecting the first-class circuit against the possibility of collapse at a time when IPL was threatening to change the face of professional cricket.
Senior ECB officials, led by the chief executive David Collier and chairman Giles Clarke, proclaimed Stanford's involvement as a coup, proof that England need not be overly reliant upon an Indian financial engine that was producing more than two-thirds of world cricket's revenue, but the scheme began to unravel almost as soon as the deal had been drawn up.
England lost the solitary contest heavily. It was intended to be the first in a five-year deal which would not only bolster English cricket's coffers but help to rejuvenate cricket in the Caribbean, but the match itself was most notable for Stanford's flirtatious public behaviour with wives and girlfriends of England players and his assumption that he was free to wander into dressing-rooms as much as he pleased. Lord MacLaurin, a former ECB chairman, labelled the contest "a pantomime" and "obscene."
Stanford's wealth was widely assumed to be more than $2bn in 2008. He was the most powerful businessman in Antigua, one of the biggest private employers and landowners on the island, a bullish personality who won friends throughout the Caribbean by the flexing of his considerable financial muscle.
The chief prosecution witness against Stanford was James Davis, the chief financial officer of Stanford Financial Group and a former University friend, who struck a plea bargain and described Stanford as "the chief faker". Defence lawyers maintained that his company was legitimate.
The ECB insisted that it carried out due diligence on Stanford's financial operation, but even as the first - and only - Twenty20 took place, doubts were beginning to surface about his financial operations. US diplomats were allegedly warned not to be seen in Stanford's company more than a year earlier, but the ECB was oblivious to the danger.
The deal was finally suspended in February 2009 when Stanford was charged with fraud. Clarke, on behalf of the ECB, spoke at the time of "the best of intentions," saying: "We did what we did because we believed we were doing the right thing to raise funds for West Indies cricket and, indeed, our own game."
The ECB was not the only body to be embarrassed by Stanford's largesse. In the USA, both Republican and Democrat politicians accepted donations.
Stanford's lawyers claimed that he was unfit to stand trial after he was assaulted in a detention centre close to Houston, an episode that they contended had left his memory severely impaired. On this entire episode, English cricket would also welcome an attack of amnesia.

David Hopps is the UK editor of ESPNcricinfo