Today a group of investors defrauded by the Stanford Financial Group Ponzi scheme, which cost some 1,500 Louisianians $3 billion in losses, sent a letter to U.S. Rep Charlie Melancon excoriating him for statements he made in an interview with WWL – an interview the Democrat U.S. Senate candidate undoubtedly regrets…

Considering that the SEC vetted the Stanford scheme as far back as 1997 and did nothing about it, giving it the imprimatur of legitimacy (and thus making the federal government implicit in the fraud), the Stanford victims are understandably red hot about Melancon’s insensitive remarks. The letter follows…

April 30, 2010
From: Louisiana Stanford Victims
To: Congressman Charlie Melancon
404 Cannon House Office Bldg
Washington, DC 20515-1807

Cc: Senator Mary Landrieu, Senator David Vitter, Congressman Rodney Alexander, Congressman Charles Boustany, Congressman Anh Cao, Congressman Bill Cassidy, Congressman John Fleming, Congressman Steve Scalise

Congressman Melancon,

As Louisiana victims of the Stanford Financial Ponzi scheme, we are saddened that someone who currently represents many of us in Congress and wishes to represent every one of us in the U.S. Senate, believes and is promulgating the false and hurtful narrative that we “should maybe have known better” and promised returns were “too good to be true” on their face.

The Louisiana Stanford Victims Group and Stanford Victims Coalition has worked tirelessly along with the Louisiana delegation, including your office, to inform the rest of Congress about the underlying facts concerning the Stanford Ponzi scheme. A key part of these efforts has been to debunk and combat the very sentiment you expressed in your interview with WWL. As you have been generally supportive of our efforts, we were shocked and hurt to hear your recent statement, which demonstrates a clear ignorance of the facts and utter insensitivity to the plight of the victims.

To clarify our situation, Allen Stanford operated a Ponzi scheme that has defrauded over 1,500 Louisianans out of their hard earned money. Estimates have Louisiana investors having been scammed out at least a half billion dollars and possibly up to two billion dollars. Louisiana was the epicenter of this fraud. The lives of the victims and their families changed forever last February as they helplessly watched federal agents wrest control of Stanford Financial and their life savings were soon shown to be stolen. After a year of battling with a troublesome receivership, victims and their families still have had no relief and continue to suffer as they learn their government bears a huge responsibility for their losses.

The Stanford victims are as diverse as the citizenry of our great state. While some wish to demonize the victims as greedy or stupid people who deserved to lose their life savings, the real identities and sobering stories of the victims do not fit this narrative. The Stanford victims are teachers, plant workers, marines, small business owners, attorneys, farmers, entrepreneurs and many other professions. Most importantly, they are law-abiding moms, dads, sons and daughters who were attempting to make the best savings decisions for their family. Now, thanks to Allen Stanford and the failure of the U.S. government, these Louisianans have been robbed of their life’s work and savings.

Less than two weeks ago, the Inspector General of the Securities and Exchange Commission issued a detailed report showing a deep failure of the SEC to act on what they knew since 1997 was a Ponzi scheme. Time and time again, the SEC failed to act.

Despite multiple examinations, red flags and insider warnings, and the clear responsibility to do act, the SEC simply did nothing.

In fact, the SEC actually aided Allen Stanford’s efforts. The Stanford Financial Advisors used the SEC’s investigations that ended without any enforcement action as evidence of the CD’s credibility. Many of us were given a false comfort to invest with the Stanford Group as we believed the government conducted a thorough investigation of their operations and bank, yet found no need to take action against them.

After reading the IG report, we are sure you can understand why the victims place the responsibility for their losses squarely upon the combined shoulders of Allen Stanford AND the SEC. We wish you and others in Congress would do the same and conduct a full hearing on the utter failure of the SEC. Blaming the victims of the Stanford Ponzi scheme only adds insult to injury and hampers our efforts to bring accountability to the SEC, secure SIPC protection and provide justice to the victims and perpetrators of this scheme.

If you or your staff would like to learn more about the underlying facts of the Stanford Ponzi scheme and the plight of the Louisiana Stanford victims, we would be happy to meet with you. In the future, we hope that you will refrain from making careless remarks and work with the rest of the Louisiana delegation on behalf of the Stanford victims. We need and appreciate your full support.

Sincerely,
Louisiana Stanford Victims

Troy and Melanie Lillie
Maurice, LA
Retired- ExxonMobil BR Refinery

Randolph J. Hebert
Lafayette, LA
President- Manufactured Products & Supply, In

Claude J. Marquette, M. D.
Baton Rouge, LA
Retired- Physician

Emma Lee Lefebvre
Port Allen, LA
Retired- Administrative Assistant

R. L. Anderson, Jr.
Baton Rouge, LA
Retired-Small Business Owner

Martha Witmer
Baton Rouge, LA
Retired

Walter Stone & Sharon Witmer Stone
Baton Rouge, LA
Part-Time Manufacturing/Manufacturing/Caregiver for husband
Cancer Patient
(Both Walter and Sharon Came out of retirement due to Stanford)

Robert Graham
Baton Rouge, LA
Business owner

Mike Hillman
Lafayette, LA
Retired

Ken Bird and Teresa Lamke

C. Barry Greer

William R. Hutchinson Jr.
Greenwell Springs, LA

Lynn Gildersleeve
Baton Rouge, LA
Retired- Medical Laboratory Sales Small Business Owner/Single Mother

Cynthia Dore
Lafayette, LA

Lawrence Kronenberger
Baton Rouge, LA
Accountant Retired- Chemical Engineer

James F. Sieberth
Baton Rouge, LA

Kimberly W. Scullin
Baton Rouge, LA
Orthodontist Registered Nurse and Business Owner

Donald and Faye Carey
Baton Rouge, LA

Jim Chisholm
Baton Rouge, LA
Retired- DOTD employee Plant Worker
Retired- Teacher

Dennis C. Childress
Denham Springs, LA

Robert D. Hays
Baton Rouge, LA
Retired- ExxonMobil BR Refinery Retired- Computer Analyst

Tom and Bethene Newland

John Cohron
Bank Consultant

Aaron R. Folse
Baton Rouge LA
Retired- Sr. Electronics Technician (ExxonMobil Pipeline)

Kathleen S. and Louis Mier, Jr. (two different retirement accounts)
Zachary, LA
EBR teacher and GP storeroom clerk

Carol I. Bordok
Baton Rouge, La.
Retired, but forced to return to work by Stanford. Was a Lab Technician at ExxonMobil, now a part-time secretary at less than half pay of what she was making at ExxonMobil.

James R. Calvin M.D.
Retired
PS from Dr. Calvin: I did what I thought was “due diligence” researching the offshore bank, relying on my financial advisor of several years, googled Stanford, and found nothing to impair investment in Cds. In the past, I have had Cds with LNB @ 11+% and annuities @ 8% so the “safe” CD investment seemed reasonable. Had there been even a hint of any kind that Stanford Group had been under any kind of investigation or suspicion by the SEC or FBI, or questions raised, our conservative nature would not have invested. So do not tell me “ maybe should have known.”