Question

How did SIB’s status as an “offshore bank” facilitate Sir Allen Stanford’s alleged fraud?

Answer 1

Based on the case study, Stanford International Bank (SIB) which status as an “offshorebank” facilitate Stanford’s alleged fraud. Before discussing what make SIB alleged fraud, wewant to explain about fraud. Fraud is an intentionally deceptive action designed to providethe perpetrator with an unlawful gain, or to deny a right to a victim. Next, fraud can occur inmany areas such as finance, real estate, investment and insurance and so on. Fraud involvesthe false representations of facts, whether by intentionally withholding important informationor providing false statement to another party for the specific purpose of gaining somethingthat may not have been provided without the deception.Next, SIB who is founder by Sir Allen that operated outside of U.S. banking regulations.With a reputed $8.5 billion in assets, the bank took money from depositors by an unusualroute. From that we already can detect that have something wrong in this companytransaction that can bring fraud. SIB alleged fraud where over $8 billion of the certificates ofdeposit (CDs) funds invested in SIB is actually used to fund Stanford’s lavish lifestyle andother investment vehicles in a complex Ponzi scheme.