Joe emails: The collapse of Stanford Financial is becoming the Madoff Event of Latin American Jewry, and in particular Mexico City’s community, and in particular some major philanthropic and leadership names that maintain one foot in Mexico City and the other in LA.
The total losses exceed $8 billion, the Jewish losses estimated in excess of $1.5 billion.
In a particular irony, it seems that Stanford has significantly destabilized the regime of Chavez in Venezuela, where the local losses exceed $4 billion.
Texas-born bank tycoon Robert Allen Stanford, who faces unfolding fraud allegations surrounding his Antiguan investment banks, may end up filling a Bernard Madoff-like role for Latin American Jews and specifically the Mexico City community.
While a smaller sum of money is involved – "only" $8 billion of investments are being questioned – a lot more is at stake.
Thousands of Mexico City’s Jews purportedly invested with Stanford’s banks, lured in by promises of 14-percent returns and a seemingly secure place for their money outside the volatile Mexican economy.
Pesos were tucked away in Caribbean accounts, and investors felt assured that their money would be available whenever the need arose.
But now that the need has arisen – the current financial crisis is by many accounts growing worse, and people are strapped for cash – Mexico City’s Jews, a community of nearly 40,000, cannot get to their money.
Earlier this month, the Securities and Exchange Commission and the FBI began investigating Stanford’s company, Stanford Financial Group, after allegations of fraud began to surface.
Federal agents raided the offices of Stanford Financial on February 17, and the SEC charged Stanford with "massive ongoing fraud" based on the $8b. investment scheme.
Stanford’s two banks were seized by Antiguan government officials last week, and a thorough investigation with the cooperation of American regulators is now under way.
All of the banks’ assets have been frozen and Stanford’s Mexico City branch shut its doors, leaving many there to wonder if they would ever see their money again.
