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STANFORD CFO ADMITS TO PONZI SCHEME . . . SHOCKER! |
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 "Prisoner's Dilemna" On August 28th R. Allen Stanford of Stanford Financial, the Texas financier accused of orchestrating a $7 billion international Ponzi scheme, was hospitalized the same day that Stanford Financial's former CFO pleaded guilty to fraud and conspiracy charges. Stanford was taken to Conroe Regional Medical Center, about an hour north of Houston, after complaining of rapid heart palpitations. Conroe is near the penitentiary where Stanford is being held. That same morning James Davis, Stanford Financial's former CFO, admitted in a Houston courthouse that he and several others knowingly bilked investors for decades. Mr. Davis faces a maximum of 30 years in prison but hopes receive a reduced sentence. In a classic case of "Prisoner's Dilemna", Mr. Davis is cooperating with federal prosecutors in helping them build a case against Allen Stanford. Davis also admitted that an Antigua banking regulator had accepted bribes from Stanford in exchange for his agreement that the Antiqua Financial Services Regulatory Commission would not destroy the company's Ponzi scheme. Leroy King, the regulator in question, is awaiting extradition to the U.S. from Antigua.
Prisoner's dilemna involves a scenario where Prisoner "A" and Prisoner "B" are both arrested. Prosecutors separate the two prisoners and offer then a reduced sentence in exchange for "snitching" on the other. In the case of Prisoner B, (i) if he snitches and Prisoner A does not snitch, Prisoner B receives a reduced sentence and Prisoner A gets the book thrown at him; (ii) if Prisoner B does not snitch and Prisoner A does snitch, then Prisoner B receives the maximum sentence while Prisoner A receives a reduced sentence; (iii) if both prisoners snitch then they both receive the maximum sentence; (iv) if neither snitches then they both get off or receive something less than getting the book thrown at them. Allen Stanford has denied any wrongdoing whatsoever. However, playing the odds, Stanford Financial's CFO has decided to tell "what had happened" and "what he'd seen or heard" in exchange for a reduced sentence. Here is the full article from the Wall Street Journal: http://online.wsj.com/article/SB125138421669063741.html |