[ by Melanie Gretchen ]

A salesperson employed by Stanford International Bank was the first witness to testify in the trial of Allen Stanford, accused of operating a $7 billion Ponzi that lasted 22 years.  [C-I Note: He's no Bernie Madoff, but he was damn close.]  Stanford, 61, stands accused of funding his Ponzi scheme, as well as the company's operations, by selling CD's (certificates of deposit) issued by the Antigua-based firm.

Michelle Chambliess, who was at the firm to get clients from Mexico and other Latin American countries, testified that the former Texas financier personally ordered her to get new clients for his bank.  Ms. Chambliess was unceremoniously fired later that year - because she didn't meet her sales quotas.

She testified alongside witness graphic designer Leonel Mejia, employed by Stanford since the late 1980s.  He said CFO James Davis asked him to alter an expired insurance policy to help reassure nervous clients.

Investor funds Stanford's "private piggy bank." During the course of examining the alleged Ponzi scheme, prosecutor Gregg Costa has outlined the ways in which Stanford spent millions of dollars of investor funds, citing cricket, his private airplanes and a company that was formed to take care of his yacht.  Stanford has pled not guilty to all 14 counts of the indictment.

In contrast, co-defendent, former CFO James Davis, has pled guilty.

Investors have nothing to show for 2-year investigation. In a separate lawsuit, the SEC is trying to get the Securities Investor Protection Corp, a fund paid for by the brokerage industry, to accept claims by investors, thus holding the whole industry responsible.

Before the U.S. District Court for the District of Columbia, presided over by Judge Robert Wilkins, the SEC argued the court to force a liquidation proceeding in Texas, while SIPA argued that the governing law does not apply to the Stanford bank, as, though the brokerage bank was a SIPC member, its offshore bank was not.  Willkins said he would try to rule soon.

The SEC under fire. During the 22 years that he allegedly ran the Ponzi scheme, Allen Stanford was under suspicion by SEC staffers as early as 1997.  But it was not until several months after Bernie Madoff confessed to his crimes that Stanford was charged by the Commission.

And here's a related point, that's interesting and amazing, and little known: the FBI, the Justice Department, the DEA, the U.S. Postal Inspector AND the Secret Service also had the opportunity to review Stanford's operations.  That was brought our by none other than departing SEC Inspector General H. David Kotz in his March 2010 report on his review into the SEC's handling of the Stanford investigation.

Will the saga of Allen Stanford end?  Will investors get their money back?  Will all observers get their money's worth - i.e., the price of admission?   Hopefully, the answer is yes.  Stay turned.

For more information, visit [Reuters, 1/25/12], [Reuters, 1/24/12], [Reuters, 1/24/12] and [Reuters, 1/23/12].