ROBERT SIEGEL, host:
From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel.
MICHELE NORRIS, host:
And I'm Michele Norris.
A couple of stories, now, about wealthy people and offshore bank accounts. In a few minutes, we'll hear why the government wants the Swiss bank, UBS, to turn over some of the names of some of their clients. First, here's an update of the story of billionaire Allen Stanford and his investment companies. The SEC has sued Stanford alleging a massive multibillion dollar fraud. And the FBI finally found Stanford today in Virginia and served him with civil papers. Meanwhile, we're learning more about his businesses.
NPR's Wade Goodwyn spoke with a former Stanford employee who helped the SEC assemble its case.
WADE GOODWYN: Charlie Rawl was already a veteran financial advisor when he joined Stanford in May of 2005 as a broker and vice president. It took him a while, but Rawl says he began to realize that what his company was promising investors was not what it was delivering.
Mr. CHARLIE RAWL (Former Broker and Vice President, Stanford Group): Well, it was the summer of 2006, where I realized that my client accounts were not performing as the promotional literature said they should've been.
GOODWYN: Rawl began getting complaints from clients. He went to management seeking answers, but says he got brushed off. Finally, he began putting his concerns in writing. For months, nothing happened, while Stanford supposedly investigated. When a meeting was called to discuss findings, Rawl was alarmed by the tone of the discussion.
Mr. RAWL: I was told that, frankly, that there were trying to determine if they were going to let - try to let sleeping dogs lie. In other words, there had been only a limited number of advisors that had caught on to this. Most of them were located in the Houston office. It wasn't the other advisors, many of whom were new to the firm, hadn't caught on or caught this.
So, they were trying to figure out whether they were going try to brush it off and not deal with it or whether they would just try to maybe do damage control and contain it to the Houston branch.
GOODWYN: Rawl couldn't believe what he was hearing. It sounded like his supervisors were complicit in a fraud. He left that meeting shaken.
Mr. RAWL: Uh-oh. I didn't like that. I was very concerned by that. I was more equally as concerned about that attitude, coming from highest levels of the firm. And I was scared about the percentage points of underperformance.
GOODWYN: Rawl began to think about getting out.
Mr. RAWL: Well, that first decision was I was not going to put more clients' money in the program. And I was going to consider options for starting to bring my clients out from that type of management into something different.
GOODWYN: Rawl and another Stanford broker in Houston named Mark Tidwell eventually quit. And in his letter of resignation, Rawl again detailed his concerns about company practices. Several days later, Rawl was informed that he and Tidwell weren't resigning, they were fired. The company then filed suit against the two men, claiming they owed the company money. Rawl and Tidwell counter-sued and in their suit, detailed Stanford's alleged deceits. And that's when the government came knocking, wanting to know more.
Mr. RAWL: Through our attorney, we were contacted by the SEC.
GOODWYN: While Rawl and Tidwell's allegations have been picked up by the SEC, both men say they are devastated by what's happened. Rawl and Tidwell's clients were lucky to have gotten their money out of Stanford, but tens of thousands of others did not. Like Austin software engineer Peter Comer who lost thousands in Stanford CDs.
Comer was getting an eight percent return, which was so high, it did make him concerned, but his brokers reassured him that the investments were safe, and the Stanford group was a strong financial institution.
Mr. PETER COMER (Software Engineer, Austin): I think one of my lessons learned is to trust your gut. And what - the other experience with me is that I've never been, you know, a victim of a fraud like this. So, it's not like I've had personal experience dealing with criminals.
GOODWYN: Calls to Stanford headquarters in Houston went unanswered. The company is referring all questions to the SEC. No criminal charges have yet been filed.
Wade Goodwyn, NPR News, Dallas.
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