type: timeline_event
On February 17, 2009, the SEC charged R. Allen Stanford and three of his companies with fraud over allegations he defrauded thousands of investors through $7 billion in sham certificates of deposit sold through his Antigua-based Stanford International Bank. The SEC amended its complaint on February 27, 2009, to explicitly describe the scheme as a 'massive Ponzi scheme.' The charges came 12 years after SEC Fort Worth examiners first identified Stanford's operation as a likely Ponzi scheme in 1997, and only months after the Bernie Madoff scandal exposed catastrophic SEC failures. Stanford had spent over $5 million on lobbying and campaign contributions over the previous decade, including nearly $2 million to Washington politicians from five party committees, three presidential campaigns, and 82 members of Congress. The Democratic Senatorial Campaign Committee received $950,000—almost half his total contributions. Stanford used this political influence to block anti-money laundering legislation that would have exposed his Antigua banking operation, hiring prestigious lobbying firm Verner Liipfert in 1999 as the Clinton administration investigated money laundering. He received a knighthood from Antigua in 2006 and employed the country's Financial Services Regulatory Commission head Leroy King, who later received a 10-year prison sentence for obstructing SEC proceedings. Stanford was arrested June 18, 2009, and convicted March 6, 2012, on 13 of 14 counts including conspiracy, wire fraud, mail fraud, and money laundering. He received a 110-year sentence for orchestrating a 20-year fraud affecting 21,000 investors. The case exposed how regulatory capture allowed a known fraud to operate unchecked while politically connected.