Oh My Fraud

Warning: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

Caleb Newquist: On the one hand, it's pretty hilarious and fun that a super rich, white American windbag would be the person to disrupt a fusty, glacially paced sport like cricket, pissing off a bunch of distinguished British people in the process.

Greg Kyte: But on the other hand, it's all too perfect and predictable that this super rich windbag ended up being, in the words of one writer, a garden variety sociopath and also an evil doofus behind a $7 billion Ponzi scheme.

Earmark: If [00:00:30] you'd like to earn CPE credit for listening to this episode, visit earmark Cpcomm. Download the app, take a short quiz, and get your CPE certificate. Continuing education has never been so easy. And now on to the episode.

Caleb Newquist: This is on My Fraud, a true crime podcast where the criminals commit economic homicide instead of plain old homicide. I'm [00:01:00] Caleb Newquist.

Greg Kyte: And I'm Greg Kight.

Caleb Newquist: Greg, I have a housekeeping item. Uh, before we get into the show, a correction, to be precise.

Greg Kyte: Oh, well, that is very exciting. Uh, because a, I don't believe we've ever done a correction before, and b, I also have a correction, uh, that we need to get out there to the people.

Caleb Newquist: How delightful. Um, okay, I'll go first, and I'll make this pretty quick. Uh, in episode 49 about the Roslyn school district, I said [00:01:30] that my celebrity doppelganger, Anthony Rapp, I said that he played Roger in the musical rent, and that is wrong. He played Mark Cohen, and I got a nice email from a listener correcting me about that. And he said there were likely some apoplectic theater nerds out there reacting to this error. So I'm happy to take full responsibility for the mistake and set the record straight for those theater nerds. And it's also in the show notes. So there you, there you go. [00:02:00]

Greg Kyte: There you go. Theater nerds. The other correction was actually brought to our attention by listener Clayton, who informed us that in episode 53, we referred to the DJ with the big mouse head as Modest Mouse when it is, in fact Dead Mouse. Uh, clearly our ignorance with regard to both musical theater and electronic house music rivals our ignorance of United States and world geography.

Caleb Newquist: Indeed. So, Greg. Moving on. [00:02:30]

Greg Kyte: I'm just glad we got that off our chest.

Caleb Newquist: Yeah, I feel better, don't you? Yeah.

Greg Kyte: We don't want we don't want angry people. Listen to the.

Caleb Newquist: Podcast. That's exactly right. Come on. Yeah, yeah. So, Greg, I am curious. Do you have any experience with offshore banking?

Greg Kyte: Uh, I mean, I've got like, ten different accounts in various Bahamian islands. Um, but apart from that, not none at all. None. Oh, okay. No, no, actually, uh, really, I don't have any experience whatsoever [00:03:00] with, like, I barely even understand offshore banking. And as a matter of fact, preparing for this episode was probably. I still feel like I have a very light grasp on what what it is. Yeah. Okay. So. So yeah, I was joking. I never I have never had an offshore bank account. Uh, I have as far as anyone knows, which is of course, which is kind of the whole point of offshore bank accounts is the whole thing is it's like it's a place to keep your money secret. So if I did have experience with offshore [00:03:30] banking, I sure as hell wouldn't tell you or our listening audience that I had offshore bank accounts. And as far as I know, I don't know anyone with offshore bank accounts. But then again, maybe that's just the offshore bank accounts doing what they're supposed to do, but making sure I don't know that those people have offshore bank accounts. Right.

Caleb Newquist: That makes perfect sense to me. Yeah.

Greg Kyte: So but if I was to try to, like, pinpoint the closest brush that I possibly had with offshore banking, [00:04:00] uh, back back in the late 1990s, I got a job as a car salesman. Yeah, I was selling Mitsubishis and Subarus at Barber Brothers Mitsubishi Subaru in Orem, Utah. The owner of the dealership. He was a he was a friend of mine, uh, also part of the leadership team at the church that I was going to. I believe he was an elder of our church. Um, that's how I knew him. Was through church. Uh, he gave me the job. He was clearly making plenty of money, uh, through his [00:04:30] car dealership. And he and his family would regularly vacation in the Cayman Islands, which is well known for offshore banking. And it was hard for me not to wonder if this respectable elder at my church was also maybe doing something shady. But if he was, he was probably paying 10% on it. So that's cool. But right. Of course. But on the other hand, uh, maybe he's just going because the Cayman Islands, they're a beautiful tropical island [00:05:00] Paradise indeed.

Caleb Newquist: All right. This episode is about a small town Texas guy who became a billionaire building an offshore banking empire. He lived large, told a lot of stories, and had a famous last name, Stanford.

Greg Kyte: As in Sanford and Son?

Caleb Newquist: No. Robert Allen Stanford grew up in Mexia, Texas, population 6893 [00:05:30] according to the 2020 census. Mejia is located in Limestone County. That's about an hour and a half south of Dallas and 45 minutes east of Waco. And as we said earlier, our geography, particularly Texas geography, can be suspect. But I'm feeling pretty good about Mejia. I think we got it. Um, but still we got it.

Greg Kyte: We got our little, uh, our little, uh, cartography, uh, tools out to make sure we got that one. Right. [00:06:00]

Caleb Newquist: Right. Yeah. So a couple of, uh, items of note about Mejia, Texas. Yes. It is pronounced Mejia, named after José Antonio Mejia, a Mexican hero for the Republic of Texas army during the Texas Revolution.

Greg Kyte: And for our listeners, that it's spelled Mexia, but it's pronounced Mejia.

Caleb Newquist: Mejia. Yeah, yeah. And this pronunciation issue has been enough of a problem over the years that the [00:06:30] town's motto is, and I am not kidding. The town's motto is a great place, no matter how you pronounce it.

Greg Kyte: There you go.

Caleb Newquist: I mean, kudos, Mejia. Yeah, nice. Well. Nicely done, well done.

Greg Kyte: Yeah, I want the I want the t shirt.

Caleb Newquist: But back to Allen. Stanford. His family was of some renown in Mahia. His grandfather, Lotus Stanford, founded an insurance company in 1932. Uh, you know, depression era. Yeah. And that helped start building his [00:07:00] family fortune. Allen's father, James, worked with Lotus in the insurance business and later became mayor of Mahia and served on its city council. Allen's mother, Sammy, meanwhile, came from a working class family and didn't meet the expectations of her mother in law at all. So for those of you listening in similar circumstances.

Greg Kyte: Those of you who have mothers in law, yeah, you're like, oh yeah, okay.

Caleb Newquist: Yeah. Ergo, Allen's [00:07:30] parents divorced when he was nine, and his mother moved to Fort Worth, where Allen graduated from high school. Okay, so from there, the legend of Alan Stanford, as told by Alan Stanford, begins at Baylor University, where he majored in finance and played football on a scholarship. Stanford started his first business, a gym in Waco. He expanded the business too quickly, however, and it went bankrupt in 1982. Two [00:08:00] years later, he and his wife filed for bankruptcy with more than $13 million in debt and only $229,000 in assets, which is quite a spread, if I may say so. Stanford and his wife little money trouble. But after declaring bankruptcy over the next decade, he would turn things around. He got into business with his dad, James, who was then running the family insurance and real estate business, and that business was called Stanford Financial Group. [00:08:30] And when the price of oil crashed in the 1980s, Texas real estate is. Many people know Texas real estate followed and the Stanfords bought up a lot of distressed property. Prices eventually recovered and the Stanfords made a fortune. By all accounts, hundreds of millions of dollars, and Allen took over from his dad when James retired in 1993. So during these heady years, Alan had spent a lot [00:09:00] of time in the Caribbean. Caribbean, Caribbean, I think Caribbean, Caribbean.

Greg Kyte: Let's go with Caribbean. The only time you say Caribbean is if you're at Disneyland or Disney World. Other than that, it's the Caribbean.

Caleb Newquist: That makes perfect sense to me. Yeah, okay. Anyway, he's spending time in the Caribbean recruiting investors and customers for his business, and he was able to raise so much money that he opted to recruit a friend from Baylor, a guy by the name of Jim Davis. And. [00:09:30] Jim joined the business, put in a bunch of money, and together they started Guardian International Bank on the island of Montserrat. Am I saying that right?

Greg Kyte: I'm going to say you are. But also it might be French and I don't know how to pronounce you. Pronounce it any French words?

Caleb Newquist: Yes. Then in that case, it might be Montserrat. Montserrat? Yeah, that's my best guess. Should we go hard? Hard? Hard. American pronunciation.

Greg Kyte: Yeah. I say let's go hard. American. [00:10:00] Montserrat.

Caleb Newquist: Montserrat. Okay.

Greg Kyte: You can put a little Texas on it here in the island of Montserrat.

Caleb Newquist: That's totally how you would.

Greg Kyte: Say it, I think. So that's how I think. That's how Allen Stanford would say it.

Caleb Newquist: Yes. Anyway, uh, so they started Guardian International Bank on the island of Montserrat in 1985. Now, how do a couple of good old boys, American dudes, start an offshore bank in Montserrat? I got no fucking idea. Greg, do you have [00:10:30] any idea?

Greg Kyte: Zero idea how you start an offshore bank in a foreign country.

Caleb Newquist: But you know what? Just. They did it.

Greg Kyte: Just accept it. They did the thing now.

Caleb Newquist: But according to a 2009 Texas Monthly profile on Stanford, quote, what happened next is subject of some debate.

Greg Kyte: And this is so wild. I love this so much.

Caleb Newquist: It's fantastic. Any time that you have to preface something with that. Yeah. Is subject of debate. [00:11:00]

Greg Kyte: Yeah.

Caleb Newquist: It's going to be exciting. So here we go. Quote. Perhaps Montserrat changed its banking laws or Stanford drew the attention of the IRS, or he got into a fight over a woman or a hurricane wiped out much of the island. Or maybe all of those things happened. Ian Moncrieff Scott, a financial writer who has covered Caribbean corruption for several decades, claims that the British government was asked by the Montserrat authorities to force him to leave, which it did. Whatever the case, Stanford [00:11:30] arrived in Antigua in 1991. This time he named the bank after himself. Yes, my friends, Stanford International Bank was just getting started.

Greg Kyte: Antigua and Sir Alan were made for each other, wrote Mimi Schwartz in Texas Monthly. One writer, who was steeped in Antiguan corruption told her you are [00:12:00] used to Texas style chicanery, which can be both big and bold, but you've never seen anything like Stanford's influence in Antigua. So Alan Stanford, his approach was pretty simple. Uh, because he did this in Montserrat two did it again in Antigua. He ingratiated himself with the local people. In this case, it was antigua's. Politicians did him favors and then asked for big favors in return. Uh, this gave him near total control over many [00:12:30] things in the country. And he would make extravagant shows of generosity, which also further indebted people to him, for example. Caleb. Pretty.

Caleb Newquist: Pretty classic approach, I would say when you Greg.

Greg Kyte: I, I would I don't know, because I've never tried to take over a island in the Caribbean before, financially or otherwise.

Caleb Newquist: When you put it that way, then yeah, maybe.

Greg Kyte: But no, but yeah, if you're if you're trying to gain influence over people. Yeah. You yes, you ingratiate [00:13:00] your people, you make them feel indebted to you and then you're like, butter them up. I need favors back. And, you know, it's it's a, it's sort of social power plays. So yeah. Yeah. In that case. Absolutely. Um, here's one example of, of his, his, uh, his chicanery as, uh, Mimi Schwartz called it in 1996. Antigua's then prime minister, his name was Lester Bird, asked Stanford to clean up the country's banking laws. Uh, you [00:13:30] know, no big deal. Just asking. Uh, just asking some guy a banker.

Caleb Newquist: Hey, to clean up the banking rules.

Greg Kyte: I mean, you know, and somebody who who has had just vast experience by having one other bank that got him driven out of the country. So. Yeah, ask that guy. It's like, hey, yeah, can you tighten these up for us? And he's like, cool, I can. And then they're like too, right, right. It'd be my pleasure. And then Prime Minister Lester Bird also asked, uh, Alan Stanford if he could [00:14:00] lobby the United States for a better relationship, uh, for Antigua. And yeah, Alan Stanford was more than happy to do both clean up the banking laws and help lobby for a better relationship with Antigua. Uh, 2009 New Yorker article written by writer Alec Wilkinson, reported that Stanford Financial Group spent nearly $5 million on lobbying the United States over ten years on issues around money laundering, financial services and banking. All [00:14:30] stuff that plays nicely into somebody who runs his own offshore bank. By the year 2000, Stanford International Bank had over $800 million in assets, and it had taken over the Bank of Antigua, uh, which was pretty perfect for Alan Stanford, because that basically made him the only lender in town. Or to put it a bit more precisely, to put a little finer point on it, he was the only lender [00:15:00] in the country. So again, Caleb, that's an.

Caleb Newquist: Enviable position to be in, wouldn't you say, Greg.

Greg Kyte: Yeah. Well, also, it puts you in a pretty powerful position because if you're the only lender in the country, people need loans. So everybody's kind of going to be polishing your butt to, to make sure that you'll give them the loans. And, you know, they're they're literally indebted to you. So yes, that's a yeah. Not a, not a not a bad not a bad place to be for somebody [00:15:30] seeking some leverage in the world. But it's interesting too, because the accounts that we read show that Stanford had this kind of mythological quality to him in Antigua, uh, one story goes that he airlifted a stigmatic priest to the US for medical treatment. Uh, but just to just to make sure we don't have to do more corrections in the future. We just want to be very, very abundantly clear that it's unclear as to whether there's [00:16:00] any truth to any of that story at all. So moving on to many people in Antigua. Alan Stanford was just this super rich, super shady guy who liked to throw his weight and his money around. Uh, in the New Yorker article that we talked about before, uh, for example, there's a story of a writer who allegedly depicted Stanford as a money launderer involved in the drug trade. Uh, Stanford sued the writer, settled [00:16:30] the case out of court, and the newspaper agreed to, quote, publish a front page apology to print twice as many copies of the issue as usual, and to deliver 100 copies of it to Stanford and to pay for his legal fees. That's like that's just rubbing their nose in it is.

Caleb Newquist: That is print.

Greg Kyte: Twice. I you're not going to sell them, but you have to print twice as many copies, and then you just gotta eat all of those extra except for 100 of those, which you [00:17:00] need to personally deliver to me and put on my desk along with my morning latte. Uh, and you know what I get from Starbucks? That's what it. Yeah, it seems like a very Devil Wears Prada sort of move.

Caleb Newquist: Yeah. I mean, it's, um, let's let's give credit where credit's due. It seems like Alan Stanford knew how to enjoy some retribution.

Greg Kyte: Okay. Yeah, that's another way to say it. Another way to say. What were you.

Caleb Newquist: Gonna say.

Greg Kyte: Was he was a dick. Yeah, [00:17:30] yeah.

Caleb Newquist: Yes. He's either he's either a connoisseur of the fine art of retribution or a fucking dickhead.

Greg Kyte: Right? Right. Exactly. So another another thing that was notable, possibly most notable from this period in the uh, Allen Stanford saga, uh, at least for our our purposes, is when Stanford International Bank paid over $3 million to the Drug Enforcement Agency [00:18:00] because a Mexican drug cartel was laundering money through its account. So no wonder I hate it when that happens. I hate it when you hate it.

Caleb Newquist: When you just.

Greg Kyte: Settled a lawsuit for somebody saying that you were a money launderer and involved with drug cartels, and then immediately after that, you have to pay $3 million because you're laundering money for drug cartels. But at least you got those 100 newspapers.

Caleb Newquist: Hey, unbeknownst to me, Greg Kite, as I'm speaking as Alan Stanford.

Greg Kyte: Right. Exactly. Of course, is somehow [00:18:30] that got through the cracks. There were whispers of more money laundering going on at Stanford's offshore bank. What? During this time. But nothing ever came of all of that. But all this controversy did nothing to stop the further endearment of Alan Stanford to the island of Antigua. On November 1st of 2006, Alan Stanford was appointed Knight Commander of the order of the Nation of Antigua and Barbuda by the Antiguan [00:19:00] government, and after that, naturally, he insisted that people refer to him as Sir Alan.

Caleb Newquist: Let me tell you something about this guy, Alan Stanford. He liked being rich. And I mean, as far as billionaires go, he wasn't near the top. Okay? He peaked on the Forbes list in 2008 at 205 with 2.2 billion. [00:19:30] But I have to say, and there's no official ranking on this, but he has got to be top ten, top 20 when it comes to billionaire showboats. Here are several examples of that. First. He parked his yacht, Sea Eagle, right next to the Antigua airport so that he could fly in and be on the water in minutes.

Greg Kyte: Because, you know, when you you got to be super important, you got to be on a boat.

Caleb Newquist: Can't can't stand being on land. Another [00:20:00] example, he had one wife, at least two girlfriends and six kids between all of them. It's indeterminate how many girlfriends, but in any case, that is as it was as complicated as you might imagine. According to Texas Monthly, when Stanford's wife visited Antigua, she was allowed to go only certain places and was always escorted by security guards, ostensibly to protect her from kidnaping, but also to prevent [00:20:30] an encounter with one of his girlfriends.

Greg Kyte: Perfect. That's that's a solid relationship right there. I mean, he's from Texas, but out here in Utah, people with one wife and at least two girlfriends, they're known as polygamists. Indeed. So. And we did a whole episode on them.

Caleb Newquist: We sure did.

Greg Kyte: Yeah.

Caleb Newquist: Allen Stanford had an untold number of private jets, but at least six, including, according to the New Yorker article, the writer Alec Wilkinson reported in his story that he got [00:21:00] a tour of Stanford's hangar and that there were, quote, two small jets and one the size of a commercial airliner, all of them looking as if they had just been polished. The floor of the hangar looked as clean as that of an operating room. Several planes were elsewhere, the attendants said. Stanford, he added, had the largest private jet fleet in the world, which that's.

Greg Kyte: That's a huge showboat thing. I think I've mentioned on the podcast Super.

Caleb Newquist: Showboat that.

Greg Kyte: My my ex-wife's uncle was a private [00:21:30] pilot for, um, yes, the Oracle guy. What's the name?

Caleb Newquist: Larry Ellison.

Greg Kyte: Larry Ellison? Yeah.

Caleb Newquist: Rich guy. Yeah, super.

Greg Kyte: Rich guy, but didn't, as far as I know. I mean, he he maybe had a couple of private jets. And I'll tell you what, like, uh, the the my ex wife's uncle told me. Just the finances involved with owning a private jet where it's like. It's not just that it costs like what, $7 million? $9 million, something to buy the jet, but then you're paying [00:22:00] a large a large amount of that annually just to maintain the thing and to house it and to have a staff to fly it. And so, like, it's not just that the initial outlay, it's the, it's, it's a, it's a money pit that you're consistently throwing stuff into just having one. And this guy had the largest private jet fleet in the world and he was number 205. Yeah, yeah. Bad choices. Allen. Sir. Allen Stanford, if that is your real name.

Caleb Newquist: And [00:22:30] I have to say, as far as billionaire showboats are concerned, Larry Ellison is up there. He's no slouch. Yeah. True.

Greg Kyte: Right. Exactly. Yeah. And but also he was, you know, at one point I don't think anymore. But at one point he was number three on that list, not number 205. So correct. No, he had.

Caleb Newquist: Like I think Larry Ellison probably at his peak could buy and sell Stanford Allen Stanford dozens of times over. Yeah.

Greg Kyte: Yeah for sure. Anyway. [00:23:00]

Caleb Newquist: No way. Like let's not get caught up in the numbers. Right. What else we got?

Greg Kyte: Oh, comparison. Comparison is the is the, uh what's the what's the quote comparison kills joy. There's something like that. And we don't we don't need to kill Allen Stanford's joy by comparing him to Larry Ellison.

Caleb Newquist: That's right. Uh, what else we got? Oh, his mansion on Saint Croix. He lived on Saint Croix. Mind you, he. I don't think from all I could tell, he did not live [00:23:30] in Antigua. His house was actually on Saint Croix. And he also owned an airline. An airline? He owned an airline. Okay. Um, a newspaper and a couple of, uh, restaurants as well, but.

Greg Kyte: And a couple of restaurants, just a, you know, a couple, couple Taco Bell franchises.

Caleb Newquist: No. Yeah. I mean, what did he do? Did he just have the whole restaurant to himself? Like, I wonder what he did, you know, probably, like, clear the hay, boys. Make sure the place is cleared out. I'm coming in for dinner. Right, right. And make sure my wife doesn't. I'm bringing a girlfriend, so make sure my wife don't let my wife in, [00:24:00] okay? Thanks.

Greg Kyte: Yeah. Yeah, only. Only DoorDash for the missus tonight.

Caleb Newquist: Yeah. All right. But I have to say, the most hilarious and also shrewd bit of lavishness was that Stanford reportedly spent 65 to $70 million on cricket in the Caribbean. Yes, cricket, a global sport with billions of fans that most Americans would be shocked to know even existed.

Greg Kyte: They'd be shocked to know that that the billions [00:24:30] of fans existed, or that the game of cricket existed.

Caleb Newquist: Probably both.

Greg Kyte: Probably both. But yeah, I yeah, cricket's one of those games that, you know, I'm sure I'm sure people who have never been familiarized with American football watched the game and go, these rules are the weird. I don't understand.

Caleb Newquist: They don't make any sense.

Greg Kyte: And we just know it because we've been watching it since we were kids. Yeah, but cricket feels like that to me where it's like, yeah, I don't know anything that's happening.

Caleb Newquist: All right. [00:25:00] Stanford first got into cricket around 2005, his main interest being for its marketing potential.

Greg Kyte: Which is so weird because again, we go, what marketing potential? No one watches cricket, but we're just thinking that's a very, uh, American centric view of it.

Caleb Newquist: Indeed. Yeah. Marketing potential, you know, and mostly this is marketing potential for himself. Right? So he assembled the best players from the Caribbean on his team called the Stanford [00:25:30] Superstars, which.

Greg Kyte: Again, beautiful. It's not the Antigua Superstars. It's not the, uh, superstars of the Caribbean, but it's the Stanford superstars. Super classy.

Caleb Newquist: Yeah. Now, if you're not familiar with the cricket and I'm betting you're not, I am not. And our listeners aren't either, because the majority are. Our international audience is very small.

Greg Kyte: Uh, growing, growing all the time.

Caleb Newquist: Growing. Right, right. But I have to say it's [00:26:00] mostly in English speaking countries. So true. Britain, Australia, these are places where people like cricket. So true. Apologies to you fans who are yelling at us. I'm sure we will be issuing corrections on your behalf in the very near future.

Greg Kyte: Yes. Now.

Caleb Newquist: For those not familiar with cricket, a typical test match, which is the classic version of the game, can last up to five days. You heard that right. Listeners who've literally never given this sport a second thought. [00:26:30] Matches can last up to five days when.

Greg Kyte: One entire workweek. Yeah, crazy.

Caleb Newquist: That's a nice way of putting it.

Greg Kyte: You're going to say, I have to come in to work on a test match.

Caleb Newquist: Not everyone loved this aspect of cricket. So in 2002 a newer, shorter version was introduced called 2020. Now, a typical 2020 match is over in about 2.5 hours, and so its popularity spread rather quickly, especially in India [00:27:00] where there are more cricket fans than there are people in Great Britain altogether. Stanford threw his support behind this newer, much shorter version of the game, and this made him a hero in Antigua and really across the Caribbean, and it made him a giant villain in the UK.

Greg Kyte: Gotcha. So the the UK was like, didn't we just kick you out? Wait, now you're doing this? The guy wait, the same guy bank the hell is.

Caleb Newquist: In cricket [00:27:30] now, huh? Anyway, Stanford's cricket obsession and hilariously brazen self-promotion reached its peak when he organized a match between the English national team and the Stanford superstars. The winners got 20 million. The losers got nothing. When the match was announced, he even landed in a gold leaf trimmed helicopter at Lord's Cricket ground with the 20 million in a plexiglass case [00:28:00] to promote the event.

Greg Kyte: So he didn't have a gold elevator escalator that he he he was in a full on gold helicopter with a glass box with $20 million of cash inside. That's that's.

Caleb Newquist: Showboat.

Greg Kyte: Exactly. Showboat. Case in point. Check in, mate. Showboat. Take that, Larry Ellison.

Caleb Newquist: The match occurred in November 2008, and I'll spare you the suspense. [00:28:30] Uh, the Stanford superstars won big, and the English were not happy about it.

Greg Kyte: Stanford International Bank's number one product was its certificates of deposit. Yep, CDs. The same thing that your grandparents might have given you for your birthday when you were a kid. Uh, did your do your grandparents give you any CDs?

Caleb Newquist: My my grandparents, uh, they were they were not exactly. You know, I wouldn't describe them as affluent, but. [00:29:00] Yeah.

Greg Kyte: My my grandparents were more Treasury, uh, Treasury notes.

Caleb Newquist: Treasury bonds.

Greg Kyte: Yeah. Like a $10 check where it's like, here's a $10 Treasury bond. And if you cash this in in five years, it'll be worth $10.50. And it's like, okay, I'm cashing it in tomorrow, so. Yeah. Yeah. Uh, Stanford, Stanford's. But but here's the thing. Stanford's CDs weren't any ordinary CDs. Stanford's CDs were based in Antigua, and they paid 3 to [00:29:30] 4%, more than any CD paid in the US. Oh, the bank had been offering these CDs for more than a decade. Uh, by 2007, when it started a big expansion. And around this time, the bank started pushing its advisors to sell a lot more of these, these CDs than its other products. And the advisors were told that they would make 30% more selling CDs at Stanford than at their previous jobs. So first off, we're saying these CDs [00:30:00] have a reasonably high interest rate compared to other CDs. And then the other thing is it's like and they got a huge commission for the brokers who were selling them. So those are some pretty powerful financial instruments. Uh, that being the case, the bank, Stanford International Bank, would put on competitions, paying individuals and teams big bonuses for selling the most CDs. The added bonus was that these products were good for customers because [00:30:30] they were safe.

Greg Kyte: Stanford CDs could be cashed in at any time, which is weird. Another way, another thing that differentiated them from normal certificates of deposit. Uh, then around the time he peaked on the Forbes billionaires list, Stanford was also named World Finance magazine's man of the year. And in an interview for that award, here's how, uh, Alan, Sir Alan Stanford described his philosophy on his business. He says, [00:31:00] quote, the Stanford philosophy for investing is based on diversification across global regions, countries, markets, asset classes, products and sectors with the assumption that risk can be minimized while maximizing return. Now, if you hear that and think, uh, that's quite a blustery word salad of nonsense, uh, yeah, you're absolutely right. That's totally a blustery word salad of nonsense. Or it's just something that like a first year finance. If [00:31:30] you're like, how? How would you address it? You know, it's like like a your finance professor gives you the, the dumb project of saying, write your acceptance speech for finance magazines for the year and how you got that. And they'd be like, oh, well, I guess we'd be diversifying across a global regions, countries, markets, asset classes, products and sectors. Is that it sounds that sounds good.

Caleb Newquist: Well, well, well we simultaneously, uh uh, minimizing risk and maximizing [00:32:00] returns.

Greg Kyte: Right. That sounds good. Okay. Just send it in. Yeah. Does that sound like ChatGPT wrote it? No. Good. Send it.

Caleb Newquist: Yeah. Well, yeah.

Greg Kyte: Despite these conspicuous hallmarks of success, some other things around Stanford's empire didn't feel quite right, including to some insiders of the company. The Texas Monthly article that we've been talking about features a couple of Stanford financial advisors named [00:32:30] Charlie Rawl and Mark Tidwell. Uh, and they had lots of questions. Here's a passage from the piece explaining some of their worries. It says, uh, why, for instance, was the auditor of a bank with a supposed $8 billion in assets, a one man firm located over a hair salon in London. When Tidwell asked permission to notify clients who had invested in the CD about forms they were supposed to submit to the IRS, he was told [00:33:00] by a supervisor to forget about it because the company didn't give tax advice. Some time later, Tidwell and Ra learned that Stanford didn't issue 1099 forms to clients so that they could report the value of their investment income to the IRS. Collecting that data was supposedly the client's responsibility. But it's not.

Caleb Newquist: Does that strike you as weird?

Greg Kyte: It it well it. Yes. No. But. Yes. No it. Well here's [00:33:30] the thing. 1099 are just show the IRS how much to tax you. Not so much you to to make sure that you're not underreporting your income. So. So I see it both ways because I do see on the one hand, they at least better be getting statements to people saying how much? I mean, yeah, but 1099.

Caleb Newquist: The client's responsibility to chase them down for those things. Right?

Greg Kyte: Right. Exactly. Now, here's the only thing that I'm saying though, is I get I get plenty of 1099 every year, and I just keep track of them and add them up just to verify that [00:34:00] my records that I've been keeping separately from them are accurate. Does that make sense? Do you see what I'm saying? So so so I so I kind of see it from that perspective. But I also go, no, no, no, the IRS requires you as a institution to file 1099. So I don't know how they got around it from that, from that side of things. Right. Yeah.

Caleb Newquist: So but not good regardless. Yes.

Greg Kyte: Basic tax documentation and compliance documents seem like table stakes for [00:34:30] any bank. So I mean, we all have banking relationships and we all get far too much tax dollars, more tax documentation than we probably need more documentation in general than we probably need from our banks. So, uh, so yeah, red flag for sure. A couple more things that would probably concern anyone who was paying attention. First, in May of 2005, the SEC wanted information on the banks CD program. Uh, management told everyone [00:35:00] that the request was routine. Uh, so no big deal. But then they also told assistants and advisors to remove any information that wasn't on Stanford International Bank letterhead from their clients files, uh, all clients notes and interoffice emails and so on. So they had a real, uh, Enron style shred party at the, uh, the old Stanford International Bank just prior. Yeah, yeah. You know, like, it's very much an Enron right before right before the SEC shows up. Let's just shred everything. That's not that's [00:35:30] sketchy.

Caleb Newquist: Yeah, very standard operating procedure.

Greg Kyte: Which is very sketchy. Uh, and also around the same time, clients started complaining that a mutual fund program's returns were not matching the returns claimed in the company's pitch books. A consultant even came in and recommended that Stanford, quote, admit that the returns that they were claiming prior to January 2006 were incorrect. All bets are off [00:36:00] as far as accuracy goes, he said, and no one can even verify it. That's pretty damning.

Caleb Newquist: Not good.

Greg Kyte: Not good at all. But all that happened as a result of all of this was some comically small fines imposed by the SEC and the Financial Industry Regulatory Authority, aka Finra, but nothing internally changed. Tidwell and Rawl were nervous, and so they got themselves and their clients out by the end of 2007. But [00:36:30] because they'd raised concerns internally for Stanford and his empire, the bank claimed that Tidwell and Rawl had been fired when in fact they had quit, and the bank sued Tidwell and Roth for $600,000 in advances that they claimed Tidwell and Rauh needed to repay to the bank. But then the SEC subpoenaed Rawl and Tidwell in July of 2008, and around the same time, 2007 [00:37:00] 2008, Stanford was boasting about his business's resilience to the Great Recession that we all remember was going on at that time, Stanford was quoted as saying. We haven't been caught up in all that subprime mortgage fiasco. We're very bullish on making a lot of money in the next 20 years.

Caleb Newquist: In January 2009, just two months after the Stanford superstars defeated the English national [00:37:30] team in that goddamn spectacle of a cricket match. Alan Stanford, his CFO Jim Davis, and the firm's chief investment officer, Laura Pendergest-holt, reported to employees that the company had just received a capital infusion of $541 million when the Madoff scandal broke, which was just around the same time. Some investors asked about any connection, but Stanford reassured them that they had no exposure. But the SEC was still knocking on [00:38:00] the door in January 2009 with subpoenas. Stanford and Davis refused to cooperate, but sent Pendergast, Holt and another executive to testify about the bank's operations. One lawyer reported back to Stanford executives that the commission, quote, wanted to be reassured that the bank is real, the CDs are real, that the money is actually invested as described in our documents, and that client funds in CDs are safe and secure.

Greg Kyte: Right? So it's kind of like, hey, so you say you're a bank, [00:38:30] but do you do anything that the banks do? Like, do you like do.

Caleb Newquist: Any banking.

Greg Kyte: Things? Are you listen, I'm super high right now. Are you real? Is it? Is any of this real? Yeah.

Caleb Newquist: What's what's real.

Greg Kyte: Here? Yeah, yeah.

Caleb Newquist: Not great.

Greg Kyte: No, no, not at all.

Caleb Newquist: And if you think that sounds bad, then you're gonna love this. In February 2009, one of the bank's executives asked Jim Davis [00:39:00] about the $541 million capital injection that they supposedly received in November. When they dug into it, the only thing that showed up was a transfer of real estate worth $88 million. Quote from one Stanford company to another that Greg Kite in the business is known as a intercompany transaction.

Greg Kyte: Right.

Caleb Newquist: And they are sometimes not legitimate. Yeah.

Greg Kyte: There or I mean, it is worth looking [00:39:30] closer.

Caleb Newquist: It is if you're if you look at such things, then you should take another look.

Greg Kyte: Right. And it's a way to inject capital, but it's also a way to remove capital from your other business. So. Right. Yeah. Even if it's not suspect, it's it's not a real not a quality play. It's not it's not improving your overall position at all. So it's just, you know, rearranging the, you know, the deck chairs.

Caleb Newquist: You got it. As the SEC continued to apply pressure, more people within the bank kept [00:40:00] asking questions. And eventually Davis and Pendergest-holt explained that the assets were held in three tiers. And it was this third tier that the majority of assets, nearly $8 billion, were held. But what they actually showed wasn't anything close to $8 billion. Pendergast Holt could only substantiate 3 billion in assets and a $1.6 billion loan to shareholder. That shareholder, of course, was Sir Allen Stanford. On February 17th, 2009, [00:40:30] federal agents showed up to Stanford offices in Texas, Mississippi, and Tennessee and accused Stanford of running a massive ongoing fraud.

Greg Kyte: As the media began to look into the mythic story of Sir Allen Stanford, everything began to fall apart. Remember the Baylor football scholarship? Baylor had no record of it. Stanford also claimed that his business [00:41:00] started all the way back to his grandfather's insurance company during the depression, but that wasn't true either. His grandfather sold that business, and we haven't mentioned up to this point, but Allen Stanford boasted for many years that he was actually related to the founder of Stanford University, Leland Stanford. And Allen Stanford claimed to have genealogy records to prove it. Also, according to The Guardian, he went so far as to fund the restoration [00:41:30] of Leland Stanford's mansion in Sacramento. Stanford University said otherwise, saying they had no record of any connection, and sued Allen Stanford for trademark infringement as he was using his name in marketing virtually everywhere. Oh, and the claim that Stanford had no ties to Madoff. Uh, that was all bullshit, too. There was exposure to Madoff investments and, quote, most of the financial figures were made [00:42:00] up. Yeah.

Caleb Newquist: The the Madoff stuff, I think virtually all of it was made up. Right.

Greg Kyte: Which is right. Uh oh. But, you know, no big deal, because remember those super safe, uh, super liquid CDs? Yeah. Uh, yeah. The bank had mostly invested that money into real estate and private equity, which is pretty much the exact opposite of a liquid investment. $8 billion in assets [00:42:30] were unaccounted for. And when the authorities showed up to Stanford offices in February of 2009, uh, Allen Stanford was also unaccounted for. Uh, it turned. Yeah, he he he disappeared. Poof. He was also a close up magician. But he turned up a couple of days later at a girlfriend's house near Fredericksburg, Virginia, where he was served with civil legal papers filed by the SEC. Allen [00:43:00] had tried to flee the country on the 17th, but when he tried to pay for his private flight to Antigua with a credit card, he got turned down because they only accepted wire transfers. And ah, yeah. And apparently he just didn't have that kind of scratch. Just, you know, not liquid.

Caleb Newquist: Darn. So I hate it when that happens.

Greg Kyte: Yeah. You know, you're trying to flee the country and they don't accept your credit card bullshit. Come on, [00:43:30] come on, come on, come on.

Caleb Newquist: It's a it's a Capital One venture card. Right, guys?

Greg Kyte: That's what's in my wallet. Yeah. Sam.

Caleb Newquist: Jackson, Sam. Jackson, everybody. Come on. Jennifer Garner, it's a problem.

Greg Kyte: How can it not be legit? Allen Stanford was arrested on June 18th, 2009, by the FBI. He was charged in a Houston courtroom a week later with seven counts of wire fraud, ten counts of mail fraud, conspiracy to obstruct an investigation [00:44:00] for the SEC, obstruction of an investigation by the SEC, and conspiracy to commit money laundering. You know what? Uh, did.

Caleb Newquist: We just double up on obstruction?

Greg Kyte: No, no, because he was he he was charged with conspiracy to obstruct, and he was also charged with actually obstructing. So it's like, hey, hey, guys, let's let's obstruct. And then they actually did it. So that's two different crimes man. Yeah. So you got he got charged with both. They brought the they brought the hammer down on the hammer down. [00:44:30]

Caleb Newquist: Yep. Yeah. All right.

Greg Kyte: Like most of what surrounded Allen Stanford. Everything that followed was also a spectacle. So Caleb, you and I are going to go through a rundown of what happened after his arrest.

Caleb Newquist: Yes, we are okay. On June 25th, 2009, Allen Stanford pleaded not guilty to the charges.

Greg Kyte: On August 27th, 2009, he was admitted to the hospital after complaining about a racing [00:45:00] heart during his transfer from a prison to the courthouse to a hearing where his lawyer was asking to withdraw from his case.

Caleb Newquist: On September 26th, 2009, he was hospitalized again after being beaten by a fellow inmate.

Greg Kyte: In January 2011, the judge in his case ruled that Stanford was unfit to stand trial because of a raging addiction to anti-anxiety medication. The judge still deemed Stanford a flight risk, however, and [00:45:30] he was not released from custody, and he was ordered to undergo treatment for his addiction so that he could stand trial.

Caleb Newquist: In May 2011, seven of the charges against Stanford were dropped.

Greg Kyte: In November of 2011, Stanford's attorneys argued that he was still unfit to stand trial due to amnesia sustained from his injuries.

Caleb Newquist: But then in December 2011, the judge found Stanford fit to stand trial after he spent months weaning off the medication he was taking.

Greg Kyte: Stanford's trial [00:46:00] actually finally began on January 24th, 2012. He was convicted after a six week trial. Prosecutors sought a 230 year sentence, the maximum allowable under law. This was 80 years more than Bernie Madoff's sentence, which was only 150 years.

Caleb Newquist: Ultimately, Stanford was sentenced to 110 years in prison on June 14th, 2012, and ordered to forfeit $5.9 [00:46:30] billion.

Greg Kyte: At his sentencing, Stanford spoke for the first time during the proceedings and said that he never swindled anyone and that his company was the victim of Gestapo tactics by government regulators.

Caleb Newquist: Stanford filed a 299 page brief appealing his conviction in September 2014 with the Fifth Circuit Court of Appeals. It was denied.

Greg Kyte: In 2016, Stanford gave a jailhouse [00:47:00] interview to the BBC, where he maintained his innocence, repeatedly said that his conviction will be thrown out and that he will walk out of prison one day. Here's a quote from Stanford. He says, I know it's going to happen, so it's not a dream, it's reality. It's right around the corner. So yes, I think about it very, very often. And I have a smile on my face and I know it's going to happen and I feel very confident it's going to happen very, very soon. I think Donald Trump is going to say [00:47:30] that exact same speech from jail during an interview with the BBC sometime very soon.

Caleb Newquist: I think you're right. Yeah. The interview is a little sidebar. That interview is quite something. There's a link in the show notes. Uh, just how delusional he is about the whole thing. Uh, at another point, he said, quote, I lived very modestly in terms of how I could have lived. Um, uh, I could go on, but we don't have time. Please read that interview. It is something. Um, [00:48:00] the final the final thing that we'll just note, uh, here with, uh, the the, the criminal justice element is that Stanford wasn't the only person who went down. Jim Davis, the CFO. Laura Pendergest-holt, the chief investment officer, Gilbert T Lopez Jr, the chief accounting officer, Mark J Kurt, the global controller. They were all convicted of or pleaded guilty to criminal charges as well, and they all were sentenced to prison time. [00:48:30] Lopez and Kurt are still serving their sentences, uh, while Davis and Pendergest-holt have been released.

Greg Kyte: As for the victims, in this case, there were thousands, around 18,000 to be exact, according to a 2019 CNBC article. The final tally on Stanford's Ponzi scheme put it at over $7 billion that he had been running for 20 years. Recent reporting has stated that recovery of assets for the victims has been slow and of [00:49:00] limited success. Uh, in February of 2023, the Stanford receiver that's the person trying to recover the money, settled with TD Bank for 1.2 billion, bringing the reported recoveries to 1.6 billion, which when you do the math, that's less than $0.25 recovered for every dollar lost. You. Yeah. Not a good not a good return on your investment. The Allen Stanford [00:49:30] case has been compared, obviously, to Bernie Madoff's Ponzi scheme a lot. Uh, they happened around the same time. Remember? Madoff was revealed in December 2008. Stanford's was in February 2009. Uh, they were the two largest investment frauds. And by that I mean the largest Ponzi schemes in history. But while Madoff's scheme dwarfed Stanford's, Stanford's was arguably further reaching and more complex due to the convoluted international structure [00:50:00] to it all. And as far as anyone can tell, that was by design. Mimi Schwartz wrote in that Texas Monthly article that, uh, the international press made Stanford out to be a yehu a flamboyant Texas, a high flying Texas billionaire. But he was, in fact a shrewd, calculating man who had given a lifetime of thought to his enterprise. As for the rest of his lifetime, Allen Stanford will do all his thinking inside U.S. penitentiary, [00:50:30] Coleman, to the Bureau of Prison Records show. His release date will be March of 2103.

Caleb Newquist: Okay. Greg, did we learn anything?

Greg Kyte: Yeah, I there was there's one thing that that really stuck out to me about this case and and again, it's, it's sort of the, the compare and contrast between, uh, well, I guess not just between Stanford's [00:51:00] Ponzi scheme and Madoff's Ponzi scheme, but also just Ponzi schemes in general. Because because here's what we know. If we know anything about Ponzi schemes, the biggest red flag is that the people who are perpetrating them promised these ridiculously high rates of return. And as a matter of fact, uh, I looked it up to make sure that I had the facts right. Uh, Charles Ponzi, after whom Ponzi schemes were named. He had a Ponzi scheme that related to, like, postage [00:51:30] stamps, and he was promising people that they could get a 50% return within a few months. So not just a 50% annual return, but just, you know, probably at least 100% annual return if you annualized it. So, so that so if you're if you're talking about a rate that's clearly too good to be true, Charles Ponzi's Ponzi scheme was that. But we've talked about this before on prior episodes, that, uh, Madoff [00:52:00] was different with his Ponzi scheme because he promised a 10.5% annual return.

Greg Kyte: Right. And and he was able to hit that for like, decades and that which and so, so a 10.5% annual return. That's not astronomical. That's not in and of itself, not a red flag, but hitting that consistently for for decades. That's what's what's, uh, you know, on the far bounds of statistically [00:52:30] possible. So, um, so again, kind of makes it a too good to be true thing when you look at it at whole. But here's what I think really sets us apart. Stanford's Ponzi scheme is, if you remember his CDs, they he was just claiming that you get a you get a certificate of deposit and what you're getting with me, you're going to get 3 to 4% better rate than you would with any CD that you get in the United States. Now, I looked at I looked at the rates for CDs [00:53:00] between 1991, which is when he started his bank in. I think that's when he started the bank in Montserrat. And was that Montserrat or was that.

Caleb Newquist: No. He started the. That's when he moved to Antigua.

Greg Kyte: That's when he moved. Okay. So let's say from what? So that's when Stanford International Bank started. Yeah. So and the CDs were the, the primary, uh, you know, financial instrument of Stanford International. Yes. Yes, yes. So the CD rates from 1991 [00:53:30] to, to to to 2023 were at the highest were like 6.5%. So if you had you have 3 to 4% on top of that, you're saying at the very top the, the highest rate he was ever given was the Madoff rate. But then also you get down to there was a period of time where CDs were were trash and were given like, like one tenth of a percent interest. Right. And so you go, okay, so if you're given three, so his if you're giving 3% above that, [00:54:00] that's still at that time that was unheard of. Yeah. I mean you remember when it's like if you own a savings account you're an idiot. Kind of. Yeah. Right. Yeah. Because it's not making you any money at all. So, um, so if he's doing three, 3%, that's what like his bottom was 3%, his top was 10.5%. So here's what makes that all interesting to me is if you have if you're claiming that you're giving a 50% return within months because the whole idea is you're not really investing it, you're just getting [00:54:30] new investors and paying the old ones what you promised them with new money. So if you're Charles Ponzi, you have to come up with a ton of new investors to pay off what you promised to the old investors. You with me?

Caleb Newquist: I am.

Greg Kyte: If you're Madoff, you're not given a 50% return within months. You're given a 10.5% annual return. You still need a bunch of investors to pay off the old investors, but a whole lot less now if you're. Which is why, purportedly, Madoff was able to perpetuate his his [00:55:00] fraud for so long. But now look at Stanford. He has to only give returns of 3% to 10% at the highest. He doesn't need nearly as many new investors as these other Ponzi schemes to be able to to keep it going, but he was making this huge push to just sell him, sell him, sell him. This is what you need to sell, go out and get more money. So I think that's a very interesting thing because again, I wouldn't say that the rates [00:55:30] that he was flaunting for his instruments were in the red flag territory, because again, you're talking about, see, like everybody goes, okay, I understand CDs here in the United States. But somebody says, hey, yeah, get one from this bank in Antigua, a tax haven, and you can get 3 to 4% more and you go, okay, I guess that kind of makes sense because if they don't have to pay taxes, whatever, maybe that okay. And it's not it's not 15%. It's not 18%, it's not 25%. It's maybe 6%. And it's like, okay, all right, I can [00:56:00] I can buy that. So you don't have the same red flag that you have with other Ponzi schemes. I thought that was I thought that for me that was I don't know. Can I say that was the coolest thing about this Ponzi scheme? Yeah.

Caleb Newquist: I mean, in terms of, like in terms of trying not to attract attention, you have to say like that is the thing that Alan Stanford that kind of cuts against his brand. Right? Like he was doing things even though the rates, the CD rates were beating, you know, were far exceeding US rates. Right. [00:56:30] And they were probably marketing those pretty aggressively. It wasn't as though he was he was showing some restraint in terms of like what he promised to return to investors. Yeah, yeah.

Greg Kyte: But again, I think that goes that goes back to um, to the quote, uh, from the Texas Monthly article that he, that he was, in fact, a very shrewd, very calculating man. Because, again, on the one hand, like you said, it shows restraint that he was like, oh, yeah, on my CDs, [00:57:00] you're going to get 3% return instead of 0.1%. But then the other thing is you go, you know what the difference is in degrees of magnitude between 0.1% and 3%. Yeah. That's like that's I mean, do the math. It's a lot. I'm not going to do it right now.

Caleb Newquist: Uh, cool. A couple of things that I have on my mind about this as of this recording, it has been 15 years this month since the fraud was revealed, and there's still litigation [00:57:30] going on trying to recover funds for victims. Yeah, so that is insane to me. Um, and it just goes to show how, uh, kind of the long lasting impact that fraud, an especially an especially large fraud like this one. Yeah. Can have on the victims. There are people out there to this day right now trying to get their money back. Right. So that's rough. Uh, the other thing I learned was from around [00:58:00] the time of Stanford sentencing, there's this article in The New York Times about how judges around that time were seeing these big financial crimes. And they were, you know, they this notion of economic homicide. And so this devastating impact on victims was a considerable factor in the sentences imposed on people like Stanford and Bernie Madoff and some others. And, uh, yeah, that one's in the show notes as well. It's a good read. It. You know, it's from it's from 15 years ago. So [00:58:30] it's kind of a it's definitely a snapshot in time of like what was going on because there were a lot of financial crimes being revealed at that time.

Greg Kyte: Yeah, yeah, yeah.

Caleb Newquist: Mortgage mortgage crisis and Ponzi schemes and all kinds of stuff. So um, pretty interesting stuff. So the other.

Greg Kyte: Thing. So let me let me ask you a question because I didn't I didn't read this. I did not read the article about, uh, financial or economic homicide.

Caleb Newquist: Economic homicide.

Greg Kyte: The idea being that you like, you're basically you've ruined someone's life.

Caleb Newquist: Yes.

Greg Kyte: Because you [00:59:00] stole, uh, which makes sense, because that was that was the big heartbreaking thing about, like, even about Enron and also obviously about Madoff was you've got these people whose life savings or their entire retirement accounts were just they just vanished. And. Yeah. And and if you're already retired, you're not going to be able to get another job to replenish that money or to, to make ends meet. So is that kind of the idea that it's like you did this fraud and it ruined a lot of people. It destroyed a lot of people's lives.

Caleb Newquist: It essentially destroyed people's lives. Yeah. Okay. [00:59:30]

Greg Kyte: Interesting.

Caleb Newquist: Yeah, that's economic homicide. Precisely the premise. And I don't know if there's anything official about that. Like, I don't think there's. You'd have to do some more digging to see if there's actual like if that's an accepted kind of like premise or notion or within the legal world, I, I, I didn't get that sense. But the impact of the crimes are essentially as if, you are right, murdering that person in [01:00:00] a, in an economic sense.

Greg Kyte: Well, I mean, and which, which makes sense because it's not hard to do the thought experiment of like, okay, oh, no, you're so, so hey, Caleb, it you're, you're 70 years old, you've long since retired. You're you're so irrelevant now because you're 70. So and and oops, now you've got nothing. Your entire nest egg is gone. Here's, here's your $2,000 a month social security payment. So yeah. Good luck.

Caleb Newquist: Yeah, you're getting a job. [01:00:30] You're getting a job wherever you can.

Greg Kyte: Yeah, but that's the thing. Maybe you couldn't even get a job. My, I'm. Listen, we've talked about this. I'm 51 and I'm getting my hip replaced in the near future. So I think when I'm 71, good time, I'm gonna be. This guy is in a wheelchair at best. So you're gonna have a.

Caleb Newquist: Brand new hip. You'll have it like your hip will only be 20 years old.

Greg Kyte: Yeah, yeah, I'll be in. Okay, so right.

Caleb Newquist: Now you're on a 50 year old hip, Greg.

Greg Kyte: Is that. Is that it? Okay. That's true, that's true. Okay. I like your positivity. [01:01:00] I'm saying that I will be decrepit, and that even greeting at Walmart would be a challenge for me.

Caleb Newquist: Yeah, right. So, yeah. Anyway, the other thing about this story, which I knew going in but was kind of underscored again as I kind of revisited it, uh, was that this story had quite a bit of coverage, despite it being overshadowed by the Madoff story. Yeah, because they were essentially happening concurrently. Right. So I guess for [01:01:30] the listeners who are just interested in this story, there is a lot more out there. Like, like we weren't able to get into. All right. The details of this story, we we covered a lot of them. But like, there's other stuff out there, uh, that are less critical to the, you know, the kind of the big beats of the story. It's just, I don't know, it's it's a fascinating case. Yeah. So hopefully we did it justice. Yeah. Um, and so yeah, I'm.

Greg Kyte: Going to say unequivocally we did the we did it justice. Well, that's it for this episode. [01:02:00] Uh, and remember, offshore banking is shady enough. No need to go around doing actual shady stuff and ruining it for everybody else.

Caleb Newquist: And also remember, only a Texas blowhard would launder dirty money through cricket, run your dodgy plunder through rugby or hurling or. Toshi instead.

Greg Kyte: Yeah. Do that.

Caleb Newquist: Familiar with Satoshi?

Greg Kyte: None of you know her. Please do.

Caleb Newquist: Please look that up.

Greg Kyte: Did you mean curling instead of hurling? Nope nope nope.

Caleb Newquist: Curling [01:02:30] is a sport too.

Greg Kyte: Also not familiar with that in the least. Check out.

Caleb Newquist: Check out by Satoshi. Okay.

Greg Kyte: That's a type of martial arts, right?

Caleb Newquist: Uh, no. I mean, maybe, except it involves 150 people playing an extremely violent version of Capture the Flag. Oh, well.

Greg Kyte: So it does sound a little bit like martial arts.

Caleb Newquist: Uh, maybe without the elegance.

Greg Kyte: Okay, okay.

Caleb Newquist: I'm telling you, man, I am telling you. Find some YouTube. I think that's.

Greg Kyte: How I'm going to get myself [01:03:00] to sleep tonight is, uh, great. Just watching Toshie videos on YouTube.

Caleb Newquist: Please, please report back if.

Greg Kyte: You want to drop us a line, or if you would like us to send you a curated, uh, recommendation of a bar Toshie video, send us an email at Omi. Fraud at earmark Cpcomm. Uh, Caleb, where can people find you? Out there in the internet. Wilderness.

Caleb Newquist: Uh LinkedIn. Slash. Caleb.

Greg Kyte: Newquist. Just. That's all you said. Linkedin. How about [01:03:30] you? Linkedin also. Linkedin. Yeah, just just our name. Just our names. You can do that. Uh, yeah. Yeah, I'm on, uh, LinkedIn Greg Kyte, CPA.

Caleb Newquist: Oh, my fraud is written by Greg Kyte and myself. Our producer is Zach Franc. Rate review. Subscribe to the show wherever you listen to podcasts. If you listen on earmark, you will or you can. I don't say you will. If you don't take the quiz, you won't get the CPE. Am I right, Greg?

Greg Kyte: You should. You should get CPE credit.

Caleb Newquist: You should get CPE if you listen on earmark. [01:04:00] Yeah. Do all the necessary things. It's pretty.

Greg Kyte: Easy. Yeah.

Caleb Newquist: So if you want some CPE, listen to earmark. Otherwise non-accountants whoever you are, thanks to the show, join us next time for more average swindlers and scams from stories that will make you say oh my God.