Executives in Stanford’s company to face fraud charges, says SEC

By Calvin Palmer

Several executives involved in Texan billionaire Allen Stanford’s alleged $7 billion Ponzi scheme will face fraud charges, the Senate Banking Committee was told today.

“We have notified several former Stanford executives that we intend to recommend fraud charges against them,” Rose Romero, director of the Securities and Exchange Commission’s Fort Worth office told US lawmakers. “These persons include former high level executives and financial advisors.”

Stanford, a flamboyant Texan billionaire, has already pleaded not guilty to 21 counts of fraud, money laundering and obstruction. A trial date has not yet been set for him.

The Justice Department has also filed a raft of charges against former Stanford employees, including James Davis, the former chief financial officer of Houston-based Stanford Financial Group, who pleaded guilty last month to counts including fraud.

The company’s chief investment officer, Laura Pendergest-Holt, accountants Mark Kuhrt and Gilberto Lopez, and Leroy King, head of Antigua’s financial services regulatory commission, also face charges.

They are accused of helping Stanford run a massive Ponzi scheme involving the sale of $7.2 billion of Certificates of Deposit.

Romero and other senior SEC officials offered apologies today for failing to detect the massive fraud despite multiple warnings.

“We deeply regret that the SEC failed to act more quickly to limit the tragic investor losses suffered by Stanford’s victims,” said Robert Khuzami, director of the SEC’s Enforcement Division.

 The SEC inspector general found that the agency knew since 1997 that R. Allen Stanford was likely operating an alleged Ponzi scheme. But it didn’t charge the billionaire until February 2009. The charges came a few months after the massive pyramid scheme of financier Bernard Madoff surfaced.

SEC enforcement officials discouraged cases that couldn’t be resolved quickly, the inspector general found.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., asked SEC Enforcement Director Robert Khuzami why no one at the SEC has been fired or demoted for the excessive delay. Other senators on the panel also wanted an answer during the hearing on the issue.

“We seem to have an instance in which one side of the agency was screaming that there was a fire, and the other side said that the fire was too hard to put out,” Dodd said.

Khuzami told the panel that the disciplinary process is under way.

He told the committee the details of the SEC’s failure in the case only have been known since the inspector general’s report was issued in April.

Khuzami also said the agency has toughened its efforts to shut down financial misconduct since the past failures.

He said the SEC is working to provide “maximum recovery” to investors hurt in Stanford’s alleged $7 billion fraud.

Inspector General David Kotz also found that the former head of enforcement in the SEC’s Fort Worth office, who helped quash investigations of Stanford, later represented the billionaire as a private lawyer.

The official briefly represented Stanford in 2006 before being told by the SEC ethics office that it was improper for him to do so.

Kotz indicated he has referred the matter to the Justice Department for possible criminal prosecution in connection with statements he made to SEC ethics officers.

He also said the official’s representing Stanford appeared to violate Texas’s rules for lawyers.

Kotz said the reforms in the SEC’s enforcement and inspections operations that Khuzami outlined may not have yet taken hold at the lower levels of the agency.

“I think that the intention is there,” he said. “I think it takes time for a culture to be changed.”

Kotz’s office has also found that the agency bungled five investigations into Madoff’s business between June 1992 and December 2008. Madoff’s fraud, which could be the biggest Ponzi scheme in history, destroyed thousands of people’s life savings, wrecked charities and jolted investor confidence during the worst days of the financial crisis.

[Based on reports by AFP and The Houston Chronicle.]

Forecasters stick to their prediction of 10 hurricanes this season

By Calvin Palmer

Hurricane forecasters are still predicting 10 hurricanes in the Atlantic basin during the 2010 season, with five of them developing into major hurricanes, Category 3 or above.

This above-average prediction is based on unusually warm tropical Atlantic sea surface temperatures and the development of La Nina.

The team at Colorado State University, led by William Gray, is sticking to its June 2 forecast of a total of 18 named storms between June 1 and November 30.

“The probability of a major hurricane making landfall along the U.S. coastline is 75 percent,” said Gray.

The team has monitored warm sea temperatures during June and July, as well as low sea level pressures.

“These very warm waters are associated with dynamic and thermodynamic factors that are very conducive for an active Atlantic season,” said Phil Klotzbach, the lead author on the forecast.

Three tropical storms have developed so far this season, one of which gained hurricane strength. But the high point of the season runs from mid-August to October.

The team predicts a 50 percent chance of a major hurricane making landfall on the U.S. East Coast, including the Florida Peninsula.

A 49 percent chance of a major hurricane making landfall on the Gulf Coast from the Florida Panhandle west to Brownsville, Texas.

A 64 percent chance of a major hurricane hitting the Caribbean islands and Central America.

The climate factors are similar to conditions that prevailed during the 1952, 1958, 1998 and 2005 seasons. The average of these four seasons shows well above-average activity.

Klotzbach and Gray predict the 2010 season will have activity in line with the average of these five years.

The trouble with predictions is that they have a nasty habit of turning out wrong. Many experts predicted Brazil would win the 2010 World Cup. They did not.

The saying goes, “Put your money where your mouth is”. I doubt either Klotzbach or Gray would bet the farm on their predictions.  And if they had in the past, would they have become rich men? It is hard to say because when these predictions go awry, they are conveniently forgotten and those making such erroneous predictions are seldom called to account.

I will wager both Klotzbach and Gray are hoping for a hurricane season far worse than they are suggesting.

First, it will enable the global warming alarmists to pat each other on the back, at the same time inflating their smug self-righteous egos. Second, it will enable them to scam more research funds from governments whose political leaders have knowledge of things scientific that is about on a par with that of my chihuahua.

Blaze at NYC apartment house claims lives of mother and four children

By Calvin Palmer

A fire at a two-story apartment house on Staten Island, New York, claimed the lives of a mother and her four children in the early hours of this morning.

The mother, 32-year-old Lisa Jones, and her four children — two-year-old Jermaine; seven-year-old Melanie, 10-year-old Brittany and 14-year-old CJ — died in their second-floor apartment in the building on Nicholas Avenue, in the Port Richmond neighborhood.

The tenants in the three other apartments escaped from the house that was not equipped with smoke detectors, which are required by law.

“We keep trying to remind people that a simple $10 or $15 smoke detector could have made a difference in saving five lives here,” Fire Commissioner Sal Cassano said.

Jones originally from Trinidad came to New York earlier this year and had worked as a security guard at the Macy’s store at the Staten Island Mall, among other jobs. The children’s father lived in Jamaica.

“She came out here to try to make a better life for her kids,” said her friend Shaquawna Meaders, 25, who lives down the street and visited the apartment yesterday evening.

The fire originated in Jones’ apartment and quickly moved through the attic space and roof. The building was well ablaze by the time firefighters arrived on the scene at 4:15 a.m. It took 140 firefighters 90 minutes to bring the fire under control.

Assistant Fire Chief Joseph Pfeifer said a firefighter was able to get Jermaine out of the burning apartment because the boy was near the front door. The other children were in the middle of the apartment and the mother was toward the rear, he said.

Jermaine was taken Staten Island University Hospital, where he died.

Nicholas Cotton, who lived in the other second-floor apartment with his girlfriend, Shannon Barbach, said they were awakened by banging. He went to the window and saw people outside yelling, “Fire!”

When he opened his bathroom door, he saw flames shooting through the wall from Jones’ apartment on the other side.

Cotton’s apartment had two exits, but Jones’ had only one, he said.

According to a preliminary investigation, it does not appear that the fire is suspicious. The investigation by fire officials is continuing.

[Based on reports by the Associated Press and The New York Times.]

Security forces move into Kingston stronghold of alleged drug baron

By Calvin Palmer

Explosions and gun fire rang out in the Jamaican capital of Kingston this afternoon and security forces moved in on the Tivoli Gardens area to take Christopher “Dudus” Coke into custody to await extradition to the United States.

Supporters of alleged drug baron Coke are fighting the extradition for drug and gun trafficking charges.

A Jamaica Defence Force soldier was shot and killed. He was among four soldiers taken to hospital, after they were shot by gunmen in the Tivoli Gardnes community. 

One soldier was wounded in the right arm and leg, one is fighting for his life and another is in a stable condition.

Police stated seven members of the security forces have been injured.

Security Minister Dwight Nelson said soldiers of the Jamaican Defense Force, in a joint operation with police, had broken down the barricades around Tivoli Gardens and were doing a house-to-house search for Mr Coke.

“The purpose of the operation is to execute the warrant for extradition and to detain Coke so he can appear in court,” Nelson said.

He insisted the police were “doing everything in their power to ensure the city remains safe”.

But some reports said police had met heavy resistance from armed gunmen as they tried to enter Tivoli Gardens, a stronghold of support for 41-year-old Mr Coke — who says he is a community leader — and is represented in parliament by Prime Minister Bruce Golding.

Coke’s supporters see him as a man who is fulfilling a role that the government does not, such as giving them money to support their children.

They have staged protests and barricaded streets to stop his arrest and extradition.

But the U.S. Justice Department says Coke is one of the world’s most dangerous drug barons. He is accused of leading a gang called the Shower Posse — owing to the volume of bullets used in shootings — and operating an international smuggling network.

He faces a life sentence if convicted on charges filed against him in New York.

On Friday, Jamaica’s Prime Minister Bruce Golding declared a state of emergency as a number of police stations came under attack.

In a televised address, Golding described the violence as a “calculated assault on the authority of the state that cannot be tolerated”.

Golding, who has promised to pursue Coke’s arrest, said the state of emergency in Kingston and the neighboring district of St Andrew “will be a turning point for us as a nation to confront the powers of evil that have penalised the society and earned us the unenviable label as one of the murder capitals of the world”.

Golding prompted the violence after, facing embarrassment over his own role in shielding Coke from U.S. prosecutors, he announced a week ago that his government would end its nine-month long refusal to extradite him.

Hailed by his supporters as a philanthropic building contractor and food importer but by the U.S. as one of the world’s most dangerous drug barons, Coke is a prominent supporter of the ruling Jamaican Labour Party.

Local criminal gangs have long been used – and protected – by the country’s two main political parties to get out the vote at election time. Coke’s position is further complicated by the fact that Tivoli Gardens is Golding’s parliamentary constituency.

Although police insist that the violence is solely the work of gangsters and drug dealers, many ordinary people deeply respect Coke as a key provider of jobs, money, schooling and food in a struggling economy.

His word is considered law on the streets of Tivoli Gardens – children stay off the streets after 8pm and the area is largely free of petty theft.

As the afternoon wore on there were reports that the violence had spread to Southside near to the Kingston Central Police station. Jamaica Defence Force soldiers and police have been deployed to that area to quell the disturbance.

Gunmen and police were also engaged in a running gun battle in the Woodford Park community of Central Kingston.

[Based on reports by the Jamaica Observer, BBC News and The Daily Telegraph.]

Raped girl left for dead dug her way out of shallow grave

By Calvin Palmer

A 12-year-old Jamaican girl who was raped, strangled and left for dead in a shallow grave, regained consciousness and dug her way out to safety.

Taxi driver Garsha Wilson faces charges of rape, abduction, attempted murder and cruelty to a child, Deputy Police Superintendent Herfa Beckford said.

Police say Wilson, who is believed to be a friend of the youngster, abducted the girl two weeks ago while she was at the Half-Way-Tree Transport Centre, in Kingston.

He allegedly took the little girl to a home in Smokey Vale, St Andrew, where he raped her and then later tried to strangle her until she became unconscious.

Thinking she was dead, Wilson allegedly buried her in a shallow grave and covered it with rocks.

The girl told police she regained consciousness and dug herself out.

Wilson is scheduled to appear in court on Friday.

Officers investigating the case said they are examining the possibility of a link to other cases, including that of Ananda Dean — the 11-year-old girl who was abducted in 2008 and her headless body dumped in Belvedere, St Andrew.

In the face of rising abductions of females by taxi drivers, Jamaican authorities have warned women not to travel alone.

[Based on reports by the Associated Press and Jamaica Observer.]

Thousands feared dead after massive earthquake rocks Haiti

By Calvin Palmer

You have to feel sorry for Haiti. One of the poorest nations in the world is not only ravaged by hurricanes but also rocked by devastating earthquakes.

Yesterday, a 7.0 magnitude earthquake struck Port-au-Prince, the capital of the Caribbean island, leaving thousands of people dead.

Hospitals and schools collapsed and were reportedly full of dead while 200 foreigners were missing from the city’s high-class Hotel Montana.

Among those killed were the head of the UN mission in Haiti, Hedi Annabi of Tunisia, along with 14 other UN staff, and the capital’s Catholic archbishop, Monsignor Joseph Serge Miot.

The presidential palace, Haiti’s grandest building, was substantially destroyed

President René Préval described the scene in the capital as “unimaginable”.

“Parliament has collapsed,” the president said. “The tax office has collapsed. Schools have collapsed. Hospitals have collapsed.

“There are a lot of schools that have a lot of dead people in them.”

The Red Cross says up to three million people have been  affected.

The quake, which struck about 10 miles southwest of Port-au-Prince, was quickly followed by two aftershocks of 5.9 and 5.5 magnitude.

The first tremor had hit at 1653 local time, the U.S. Geological Survey said.

Phone lines to the country failed shortly afterwards.

UN officials said at least 14 people had died when the UN’s five-story headquarters in Port-au-Prince collapsed. Around 100 were still thought to be missing, many feared to be under the rubble.

Ten Brazilians, three Jordanians and one Haitian had been confirmed killed, a senior UN official said, adding that the number was likely to rise.

China has indicated that eight of its UN peacekeepers are dead, with another 10 unaccounted for.

Stressing a major international relief effort would be needed, UN Secretary General Ban Ki-Moon said the UN would immediately release $10m (£6.15m) from its emergency response fund.

President Barack Obama vowed “unwavering support” for Haiti after what he called a “cruel and incomprehensible” disaster.

He said he had ordered “a swift, co-ordinated and aggressive effort to save lives” and that the first U.S. rescue teams would arrive later today.

A U.S. Navy aircraft carrier is expected to reach Haiti in a couple of days and a number of smaller vessels are already in the area, U.S. defense officials said.

The Red Cross is dispatching a relief team from Geneva and the UN’s World Food Program is flying in two planes with emergency food aid.

The head of the International Monetary Fund (IMF) said it would co-ordinate with other international agencies to offer help as swiftly as possible.

The World Bank also said it was sending a team to assess the damage and plan recovery. It said its offices in Port-au-Prince had been destroyed but that most staff were accounted for.

As UK charities co-ordinated their own multi-million pound relief effort, a 64-strong team of British firefighters from across the country volunteered to fly out to Port-au-Prince. They will be supported by search and rescue dogs and 10 tons of equipment.

Prime Minister Gordon Brown promised the government would provide emergency aid, telling the House of Commons that Haiti had “moved to the centre of the world’s thoughts and the world’s compassion”.

Medical staff from the organisation Médecins Sans Frontières said they were mobbed in the city by people with severe traumas and crushed limbs, as most of the medical centres were put out of action.

“We need to get people in, and get people fast. There’s not a shortage of getting people to go, but it’s how to get them there,” said Paul McPhun, the organization’s emergency management team director.

Canada, Australia, France and a number of Latin American nations have also responded with aid.

[Based on reports by BBC News and The Daily Telegraph.]

World’s largest cruise ship docks at Florida home port

By Calvin Palmer

The world’s largest cruise ship docked at Port Everglades in Fort Lauderdale today accompanied by a flotilla of small boats.

The Oasis of the Seas with its 16 decks is 40 percent larger than its nearest rival and five times the size of the Titanic.

Oasis of the Seas comes into its home port of Port Everglades, Florida. Picture courtesy of the Associated Press.

The $1.5 billion ship boasts 2,700 cabins and can accommodate 6,300 passengers along with its crew of 2,100.

The Royal Caribbean Cruises vessel set sail from Finland in late October and will embark on its first cruise on December 5.

The Oasis of the Seas braved high seas and hurricane force winds in the North Atlantic, adding two days to its journey from the STX Europe shipyard in Turku, Finland.

The 225,282-ton ship features various  “neighborhoods” — parks, squares and arenas with special themes.

Workers will spend the next few days tending to the final details, including the installation of some 12,000 shrubs, plants and trees in the Central Park neighborhood.

Miami-based Royal Caribbean plans a private performance by pop singer Rihanna on November 19, followed by a national television debut on ABC’s Good Morning America on November 20.

[Based on reports by the Associated Press and Miami Herald.]

Texas financier Stanford stripped of knighthood

By Calvin Palmer

Texas financier R. Allen Stanford, awaiting trial on fraud charges, has lost the knighthood bestowed on him by Antigua and Barbuda.

The National Honors Committee voted unanimously to revoke Stanford’s title for embarrassing the nation by running an alleged Ponzi scheme out of his Antigua-based offshore bank, chairwoman Jacqui Quinn-Leandro said.

Stanford is in jail pending his trial for allegedly defrauding some 28,000 investors out of $7 billion by selling them what U.S. authorities say were bogus certificates of deposits.

Stanford received his knighthood in 2006 from the governor general — the representative of Queen Elizabeth II in the country — and was widely known as “Sir Allen” in the Caribbean nation.

A group of investors has filed a lawsuit against Antigua and Barbuda alleging that local authorities failed to adequately monitor Stanford International Bank Ltd and profited from the fraud.

The financier provided loans to the government and became the country’s largest private employer, with businesses that included a development company, cricket stadium, newspaper, an airline and two restaurants.

Quinn-Leandro said the six-member honors committee, made up of senators and members of Parliament, voted last month and formally informed Prime Minister Baldwin Spencer of its decision on October 26.

It now remains for Spencer to forward the decision to the governor general for a signature, which is considered a formality.

[Based on a report by the Associated Press.]

Royal Navy and U.S. Coast Guard seize cocaine worth $55m

By Calvin Palmer

A vessel containing $55 million worth of cocaine was seized off the Venezuelan coast today by a U.S. Coast Guard team from Miami, says The Miami Herald.

A Royal Navy frigate has seized cocaine with an estimated wholesale value of £33 million from a speedboat off the coast of South America, says The Daily Telegraph.

The U.S. team was aboard a British Royal Navy frigate on routine patrol when it spotted the crew aboard a nearby vessel tossing packages overboard, said Lt Cmdr Matthew Moorlag, a Coast Guard spokesman.

In a night-time operation, HMS Iron Duke, working with the U.S. Coastguard, boarded the drug traffickers’ vessel and seized the cocaine weighing three-quarters of a tonne.

The go-fast vessel was about 25 miles west of Curacao, an island just north of the Venezuelan state of Falcon.

Iron Duke first spotted the speedboat, known as a “go-fast” which is a vessel specially built by the traffickers, and scrambled its Lynx helicopter to investigate.

After dispatching a Lynx helicopter and having a Coast Guard team board the vessel, U.S. and British forces recovered 36 bales of cocaine worth $55 million — and detained the four-member crew, U.S. officials said.

“That’s that much less cocaine that would end up on the streets,” Moorlag said.

The frigate then launched its seaboats after the helicopter crew observed cocaine bales being thrown overboard from the speedboat.

Along with US Coastguard personnel, the Iron Duke crew members carried out an armed boarding of the vessel and detained the drug traffickers.

The men who were detained are now in U.S. custody at an undisclosed location. Coast Guard officials would not say if the four were still at sea.

As well as seizing the drugs, the speedboat was destroyed as it presented a hazard to local shipping.

The Miami-based team was aboard the British Royal Navy frigate HMS Iron Duke, which was on routine patrol in the Caribbean as part of its counter-narcotics mission when it spotted the go-fast vessel.

The seizure was made while the Portsmouth-based Type 23 frigate was carrying out patrols in the Caribbean as part of a multinational task force to counter drug smuggling in the region.

Iron Duke’s executive officer, Lieutenant Commander Alasdair Peppe said: “This is a good start to HMS Iron Duke’s North Atlantic deployment.

“After only a week on patrol the ship has made a significant seizure of cocaine.

“I am very proud of the whole of Iron Duke’s ship’s company, all of whom have played a part in this success.”

For students of journalism, this story demonstrates the shift of emphasis that can occur in newspapers. The Miami Herald plays up the role of the U.S. Coastguard, consigning the Royal Navy to a supporting part in the operation. The Daily Telegraph flies the flag and gives the Royal Navy greater prominence.

The explanation is simple and has nothing to do with jingoism by either publication. A story about the Royal Navy will not sell newspapers in Miami, just as a story about the U.S. Coast Guard will not sell newspapers in Britain. It really is as simple as that.

Stanford executive pleads not guilty to criminal charges

By Calvin Palmer

Laura Pendergest-Holt, the chief investment officer of Stanford Financial Group, pleaded not guilty today in Houston to charges of obstruction of justice and conspiracy to obstruct justice.

Pendergest-Holt, 35, is the first person to be criminally indicted in the federal investigation of R. Allen Stanford’s banking and network of financial services companies.

She was freed on a $300,000 bond. Her trial was set for July 20.

If convicted, Pendergest-Holt could face up to five years in prison on each count.

The Securities and Exchange Commission filed a civil lawsuit on February 17, alleging an $8 billion fraud by Pendergest-Holt, Stanford, finance chief James M. Davis and three Stanford Financial Group companies.

Billionaire Stanford has said he expects to be indicted. Davis is cooperating with the SEC investigation, according to his lawyers.

[Based on a report by the Associated Press.]