The famous Bellagio Casino in Las Vegas has hosted many of the most famous – and infamous – gamblers in the world. One of those players is now potentially facing a long prison sentence for playing with other people’s money.
According to court reports, Sir Allen Stanford owes the Bellagio over US$250,000 in markers. Mr. Stanford is currently facing charges of financial fraud by orchestrating a “Ponzi scheme” on his investors.
The holding company that manages the Bellagio has filed suit to recover US$258,000 from loans the casino paid out to Mr. Stanford for use in the casino last January. A month later, when the casino sought repayment on the markers, Mr. Stanford’s checks were returned due to insufficient funds. The casino also seeks to recoup the 18% interest rate on the loans plus court costs.
Mr. Stanford, who previously ran his “Stanford Investment Group” out of an office in Houston, is currently sitting in a prison cell in Texas. US Justice Department officials have charged Mr. Stanford with numerous counts of investment fraud and money laundering while he lied to his customers about the rate of return on certificates of deposit issued by his bank based on the island of Antigua.
Among the accusations that Mr. Stanford faces is that he operated a “Ponzi scheme”, also known as a “pyramid scheme”. In such a scheme, the person perpetrating the fraud engages an initial wave of investors, promising unrealistic return rates on their investments. After a second wave of investors buys in, the perpetrator pays the first wave with the second wave’s money. The process continues with each successive wave of investors.
Dick DeGuerin, Mr. Stanford’s attorney, stated that the reason that his client could not repay the Bellagio was that federal law enforcement officials seized his assets. Mr. DeGuerin sent a message to a newspaper in Britain, where Mr. Stanford received an honorary knighthood, stating that Bellagio should pursue the federal government and the company receivers to recover the debt.
