Texas Financier Served Legal Papers In Virginia

FBI agents have served Texas billionaire Robert Allen Stanford with legal papers in a multibillion-dollar fraud case. The FBI, acting at the request of the Securities and Exchange Commission, found Stanford in Fredericksburg, Va. Stanford is not under arrest or in custody. Fallout from the fraud case is already rattling around the global financial system.

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ARI SHAPIRO, host:

Texas billionaire Robert Allen Stanford was served with civil papers in Virginia yesterday. The FBI tracked him down there. The Securities and Exchange Commission accuses Stanford of a multibillion dollar fraud. Over the last two days, his financial empire has come apart. Until recently, Stanford's companies had an air of exclusivity. They exuded power and class. NPR's Wade Goodwyn reports if it was all a mirage, as alleged, it was well-staged, fooling brokers and investors alike.

WADE GOODWYN: Software engineer Peter Comer is no financial neophyte. He graduated with a degree in finance from the University of Texas two decades ago. He's kept a diversified portfolio, and two years ago when his broker recommended he invest with the Stanford Group, he checked it out and bought some certificates of deposit at an eight percent return.

Mr. PETER COMER (Software Engineer): It was, you know, backed by the Stanford Group of companies, which is a $50 billion under management brokerage firm. So his whole position is very safe.

GOODWYN: Comber says nothing seemed amiss. He checked his accounts online, got glossy mailings; there was a regular stream of communication.

MR. COMBER: Not only in my statements, but also financial reports on the bank, which now appear to be all phony numbers.

GOODWYN: It wasn't only investors who were fooled. Former Stanford broker Charlie Rawl left a large financial firm to go to work at a place with a reputation for an aggressive and entrepreneurial investment strategy. It took him about a year to realize all was not what it seemed at Stanford.

Mr. CHARLIE RAWL (Former Stanford Broker): One of the reasons I joined the firm was for this specific management strategy. They showed me the track records. Never in my wildest imagination would I even dream that you would move to a financial services firm and they knew the numbers were inaccurate.

GOODWYN: FBI agents spotted Allen Stanford yesterday riding in a car with his girlfriend in Fredericksburg, Virginia. He was served with legal papers announcing the start of a brand new chapter in his formally fabulous billionaire life.

Wade Goodwyn, NPR news, Dallas.

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