Well-off Venezuelans say Chavez led them to Stanford

Reuters published an article on 19 February with the above headline.

“CARACAS – Droves of middle-class and well-heeled Venezuelans invested with Texan financier Allen Stanford, who is accused of “massive fraud,” because they say they feared their money was not safe at home under socialist President Hugo Chavez.”

Go here for the complete Reuters article.

This is, simply, crap.

Chavez certainly is guilty of many crimes including treason, conspiring to commit murder, theft and other acts of corruption, etc.

But it’s not Chavez’s fault that “droves of middle-class and well-heeled Venezuelans” foolishly placed their savings with Stanford International Bank and/or Stanford Bank Venezuela.

There are many reputable, honest and well-managed financial management firms in Caracas where the Venezuelans who were bilked by SIB could have placed their savings.

One hour of due diligence would have been more than enough to confirm that SIB/SBV was not kosher.

Why didn’t these bilked savers do their homework?

Caracas Gringo posed this question to some of the honest financial managers in Caracas and Miami with decades of experience doing business with Venezuelans. Their responses:

*Greed. Most (if not all) of these “investors” were lured by the impossibly high returns SIB/SBV offered clients. Many invested with SIB/SBV after first visiting other honest financial managers in Caracas and Miami who offered real-world investment opportunities; i.e. lower yields, and the possibility they might lose money on some investments if the markets soured.

*Ignorance. Venezuelans who invested in SIB/SBV simply did not do their homework. SIB/SBV had been plagued for years by reports and rumors of financial shenanigans. Potential investors could have visited SIB’s website, could have downloaded the financial data, and could have asked financial experts to study the numbers. What’s more, over the past year the Stanford Financial Group had been the subject of numerous articles hinting that something was very wrong with the group. One would think that after surviving the financial debacle of 1993-1995, Venezuelan investors as a group would be more prudent, but they weren’t. There’s a saying: “Fool me once, shame on you. Fool me twice, shame on me.”

*Cheat the taxman. Many Venezuelans who invested in SIB/SBV, particularly the “well-heeled” types with the means to, say, visit Miami and open bank accounts there, chose Stanford instead because they wanted to evade/avoid possible tax liabilities in Venezuela and the United States. The fact that SIB/SBV assured clients their offshore financial transactions would NOT be reported to US and Venezuelan tax authorities was a major enticement. But it was also a huge red flag that SIB/SBV was a criminal enterprise.

About Caracas Gringo

Representing less than 0.00000000001515152% of the world population as of 31 December 2011.
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