Alex Dalmady, The Man Who Exposed Fugitive Financier Allen Stanford
Alex Dalmady was just trying to do a favor for a friend when he uncovered one of the biggest potential frauds in banking history.
The amateur investor, a 48-year-old Venezuelan financial analyst who lives in southern Florida, went online and within hours discovered major discrepancies in the business model of fugitive financier Allen Stanford's $50 billion Stanford International Bank. Stanford was charged with "massive fraud" by the SEC on Monday and since then stories about his tax problems, suspected money laundering for drug cartels and lobbying activities have snowballed.
"There were a number of things that struck me, from the lack of detail to the simplicity of the business model to the lack of sophistication in the language they used," Dalmady tells Huffington Post.
Dalmady says that he told his friend to take his money out "as soon as possible," convinced that it was almost impossible for the bank to produce the returns it was claiming.
Intrigued by the breadth of the potential fraud, Dalmady wrote an article to explain his suspicions despite the fears of his wife.
"My wife was really scared. She said, 'You're calling these guys out by name - it could get you in trouble' and I said, 'I know'. I had to."
His article, "Duck Tales," was published in a Venezuelan economic publication, Veneconomia, where he noted one of his suspicions - the bank's one board member was an "85-year-old cattle rancher and used car dealership owner". The article was soon was picked up by a financial Website and ricocheted around the world until Business Week covered his suspicions last week.
Dalmady is already being compared to Harry Markopolos, the whistleblower who repeatedly warned the SEC in vain about Bernard Madoff's massive Ponzi scheme.
Dalmady says that he was definitely inspired by the revelations about the Madoff scheme.
"We were all blind and the Madoff thing blew the cover off... I just wanted to save some people some money but I didn't and I'm sorry."
In fact, Dalmady says that his warnings didn't prevent some investors from being duped by Stanford.
"I heard about someone who put $50,000 in to Stanford after reading the article. But you can't stop stupid."
Dalmady, who says that he has not yet been contacted by the SEC or other federal officials, says that he never thought about approaching the SEC about his concerns partly due to Stanford's extreme wealth.
"You consider going up against someone who's on the Forbes [wealthiest Americans] list and I don't know."
Dalmady, who adds that he has never received any threats, believes that Stanford knew the SEC was preparing to charge him.
"Allen's got to be gone for a couple a months. I don't think he just disappeared. He had his retreat plans."
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First Posted: 02-18-09 11:30 PM | Updated: 03-21-09 05:12 AM