Stanford's banks in the Caribbean are in the hands of regulators as many customers stood in line trying to get their money. Some people and organizations who Stanford used to support are lining up to distance themselves. A federal judge in Texas is taking himself off the bench from the civil complaint against Stanford because someone he knows is an investor.
The fallout from the Stanford fraud allegations just keeps on coming. On Friday, it hit the sports world. The England and Wales Cricket Board cut ties with Allen Stanford. The men's professional tennis tour ended its deal with Stanford Financial Group and major league ballplayers are among the ranks of thousands of investors who can't get to their money.
An account statement is as close as Houston attorney Trent Rosenthal can get to his money.
"There's no reason to include me in this massive fraud scheme," said Rosenthal.
When a Dallas judge froze Stanford assets Tuesday, he also froze one of Rosenthal's investment accounts. The problem is it holds no Stanford-backed money, rather Stanford is just the administrator.
"I don't know if a district court judge knows that this order had the effect of freezing these assets that belong to a bunch of people out there that had just regular old brokerage accounts," said Rosenthal.
Among the investors are two professional ballplayers: Yankees outfielders Johnny Damon and Xavier Nady. Though they make millions each year, either their money or credit card accounts are now frozen. Damon was quoted as saying he can't pay his bills.
That's the extreme, surprisingly from a superstar. However, it's also why Rosenthal has filed a motion in federal court asking a judge to dissolve the temporary restraining order that froze Stanford assets for people in his and Damon's situation.
"I just think it is too broad," said Rosenthal.
The filing comes on the same day as regulators in the Caribbean took control of Stanford's bank in Antigua. The bank's directors requested the takeover because of concern it would collapse. People have been lining up all week to get their money.
Back in Houston, Rosenthal told us about his concerns when solicited by Stanford advisors to do more than just use them as an administrator. He describes lavish client services inside the Galleria offices including a private dining room with a chef and a movie theater. Those were red flags.
"I didn't understand how they could have enough business to justify that kind of client service," he said.
Rosenthal hopes a judge will set his motion for a hearing soon. If nothing happens, the money could be tied up for years. An attorney familiar with cases like these tells us that sometimes people don't get anything for up to a decade.
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