The next big financial scandal

By Thomas Lifson

Critical mass of public attention has been reached. A financial scandal uncovered by a blogger has led to charges of a massive financial scandal. It is yet another financial scheme luring in investors with returns that actually were too good to be true. And yet another guy who has given a lot of money to Democrats.

The SEC accuses Stanford International Bank, run by billionaire R. Allen Stanford, of "massive, ongoing fraud" in selling $8 billion worth of certificates of deposit bearing unreasonable high interest rates.

The bank is located in Antigua and has customers all over the Caribbean. US operations are in Houston, where US authorities have centered their probe.

Alex Dalmadu, writing in the anti-Chavez dissident Venezuelan blog The Devils Excrement, uncovered suspicious information and spread it through the blogosphere. Regulators eventually caught on. The dangerously unregulated internet (as certain American leftists regard it) strikes again. The free flow of information on the net benefits everyone.

Update: Dan Riehl writes:

Culture of Corruption? Let this sink in. As far back as 2002 a watchdog group raised concerns regarding almost $100,000 Stanford Financial Group (SFG) gave to 527s possibly for specific influence on legislation - with 40k of that going to, so we've been told, Obama's good friend Tom Daschle.This year Obama raked it in from SFG. But there's more given Dashcle's speciality - Health Care Tech. Stay with me, it comes together.

The report cites examples such as the Stanford Financial Group, which gave $40,000 to the 527 group of Senate Majority Leader Thomas A. Daschle (D-S.D.), and $50,000 to that of Democratic Caucus Chairman Martin Frost (Tex.). At the time of the donations, Stanford was fighting a Clinton administration proposal on money laundering, and neither leader protested when congressional Republicans scuttled the bill.

Fast forward to Oct. 2008. Health Systems Solutions is "poised for rapid growth."Hmm. HSS is, essentially, SFG. SIB (below) is Stanford's offshore bank. And their business is? And Daschle was going to do what with medical records and with Health Care in general? No wonder they were "poised for rapid growth". At whose expense? Just what vendors do you think would get the business as they gave America the business with "health care reform" given these connections? Hmm. Change you can pay for, maybe?

Stanford International Bank Ltd. has agreed to purchase up to $5 million in the convertible preferred stock of Health Systems Solutions Inc.
The agreement gives Health Systems Solutions (OTCBB: HSSO), a software and technology company based in Tampa, long-term capital to invest in developing new products and services, Stan Vashovsky, chairman and chief executive, said in a release.

Hat tip: Monica Showalter