Ponzi Schemer Duped by Ponzi Scheme

You would think that, as the operator of a $9 billion scam himself, Allen Stanford would have been able to spot another Ponzi scheme, but apparently not: Stanford, who was charged by the SEC yesterday, lost over $500,000 of his clients’ money to Bernie Madoff. Unsurprisingly, Stanford lied about the matter. In a statement, he assured his victims that their investments “had no direct or indirect exposure to any of Madoff’s investments.” Of the 25 pages of allegations against Stanford, the SEC says “Perhaps the most alarming is that Stanford Investment Bank has exposure to losses from the Madoff fraud scheme despite the bank's public assurance to the contrary.”