By Francisco Alvarado
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By Chris Joseph
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In October 2003, he found a suitable home to mirror this new image, paying $10.5 million for a massive, 57-bedroom mansion on the Coral Gables waterfront built by the Wackenhut family. The estate was outfitted with turrets, grottos, a pub, and a throne-like toilet. He rechristened it Tyecliffe Castle.
Though he'd been married since 1974 to a Texas dental hygienist named Susan, Stanford began keeping mistresses around the Caribbean and Florida. According to court documents, he fathered six children with four women and paid around $200,000 a month in child support. One mistress, Louise Sage, lived in the Gables manor with two of Stanford's children.
In the late '90s and '00s, the Stanford Group became a prominent player in South Florida sports and charities, sponsoring the VIP lobby at the American Airlines Arena, the Sony Ericsson Open in Key Biscayne, and the International Polo Club in Palm Beach. Stanford also gave heartily to local nonprofits, including the Kiwanis Club of Little Havana and the Festival of the Arts in Boca Raton.
By 2007, just 16 years after opening as a small bank on a tiny island, Stanford's enterprises seemed to have amassed a spectacular amount of wealth. The bank in Antigua counted 30,000 customers in 131 countries with more than $8 billion in investments. The Houston-based brokerage managed 35,000 accounts worth more than $50 billion. In addition to the downtown Miami location, the company operated South Florida offices in Boca Raton, Bonita Springs, Fort Lauderdale, Vero Beach, and Longboat Key and employed more than 500. He purchased an airline, a newspaper, and a number of restaurants in Antigua. Forbes estimated Stanford's personal worth at $2 billion.
Court filings spell out the South Florida lifestyle that came with all the wealth: he spent $75,000 in Christmas gifts for his children by Louise Sage, regularly chartered $100,000 yachts, kept a $100 million fleet of personal jets, and made $25,000 monthly payments on his mansion.
In his more public dealings, Stanford's thin veneer of supposed old-money aristocracy always seemed moments away from cracking. During a now-infamous exchange on live television in late 2008, a sycophantic CNBC reporter asked him: "So, is it fun being a billionaire?"
Sir Allen shifted uncomfortably in his seat, chuckled awkwardly, and cleared his throat. "Hmm, uh, yes," he said, eyes darting. "Yes, I'd have to say it is fun."
In January 2003, one year after he started as an investment broker at Stanford Group Company, Charles Hazlett packed a cardboard box inside his apartment-sized office on the 21st floor of the Miami Center. He had just quit, after yet again demanding a meeting with top officials to talk about how the CDs performed so well.
Hazlett's customer in Curaçao had pulled out his $5 million investment one month earlier, but Hazlett stuck around longer, hoping his bizarre run-in with Laura Pendergest-Holt and the frightening, religion-tinged dressing-down from James Davis had been an aberration.
Now he believed the worst. He had no proof of what exactly Sir Allen was up to in his Caribbean hideout, but Hazlett wanted no part of it. He called his lawyer.
"I want to take these guys to court," Hazlett said.
A few weeks later, the broker and reps from his former company met in a Boca Raton arbitration court run by what is now called the Financial Industry Regulatory Authority, an industry group sanctioned by the SEC. Hazlett spelled out his experience: Brokers were heavily pressured to sell offshore CDs and were stonewalled when they tried to find out where the CDs were being invested.
Repeated calls from New Times to the SEC's press office seeking comment for this story were not returned.
"I thought, 'At least I put my story out there and someone on the regulatory side is going to realize these are bad guys,' " Hazlett recalls today. "Because I know I'm not the only one that had this experience."
Hazlett lost his case and never again heard from the SEC. He wasn't the only Stanford employee complaining to regulators. In fact, even as Stanford's business holdings and personal wealth grew exponentially, his brushes with legal and regulatory authorities were frequent, and the warning signs that something was amiss were many.
In 1999, a DEA investigation found that members of the vicious Juárez cartel in Mexico had deposited more than $3 million in Stanford's bank to launder drug money. Stanford quickly surrendered the cartel's money to the DEA and earned praise from the agency for his quick action. But later that year, federal regulators placed Antigua on a blacklist of nations suspected of money laundering and fraud.
That same year, the Clinton administration introduced a bill to crack down on overseas banks favored by gambling rings, drug militias, and terrorists. Two months later, according to a study by consumer advocacy group Public Citizen, Stanford hired a powerhouse lobbying group to fight the bill and began donating to both major parties. That year, he handed out $208,000 to Republican campaign committees and $145,000 to Democrats. Among his biggest recipients were powerful Texas lawmakers, including House Democratic Caucus Chair Martin Frost. The bill, despite passing a House committee 31-1 with strong Treasury Department backing, was allowed to die in a Senate committee.