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June 19th, 2009
02:53 PM ET

Financial Dispatch: Mini-Madoff?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/CRIME/06/18/stanford.fraud.charge/art.stanford.gi.jpg caption="Allen Stanford, right, poses with his Antigua cricket team in November 2008."]

Andrew Torgan
CNN Financial News Producer

Texas billionaire Allen Stanford was indicted today on charges of criminal conspiracy to commit mail, wire and securities fraud, actions that earned his company an estimated $7 billion dollars, according to court documents.

Stanford was taken into custody Thursday night in Stafford, Virginia, the FBI said.

In February, the SEC shut down Stanford’s financial operations - based in Antigua and the Caribbean – and froze his assets while filing a civil suit accusing him and two other senior executives of committing a fraud it characterized as a “massive Ponzi scheme.”

Four others, including an Antiguan official, have also been indicted in the case.

The alleged fraud involved billions of dollars of certificates of deposit issued by Stanford International Bank on Antigua that paid unusually high returns and were marketed all over the world.

Job rates rise in nearly every state

Forty-eight states and the District of Columbia recorded unemployment rate increases in May, the government reported today, while one state registered a decrease and one state had no change.

Several states and regions posted their highest unemployment rate since the report first debuted in 1976.

Over the year, jobless rates were higher in all 50 states and the District of Columbia.

Michigan once again led the nation with a 14.1% jobless rate, up from 12.9% a month earlier, followed again by Oregon at 12.4%, up from 12% in April. Thirteen states have rates above 10%.

The spike comes a month after the unemployment rate declined in 21 states in April.

Where the jobs are

Looking for work? Move to North Dakota.

The state tied Nebraska with the lowest unemployment rate in the nation in May - a mere 4.4% - and added 3,000 jobs last month. The national unemployment rate, meanwhile, rose to a 26-year high of 9.4% in May.

Labor experts attribute the state's good fortune to its diverse range of industries. All sectors are seeing growth, even the oil industry, which had contracted quite a bit after last year's price spike. Mining, construction and agriculture have all experienced double-digit employment growth since 2000. Health care and transportation are also key industries.

The price of 24 songs: $1.92 million

A federal jury on ruled Thursday that a 32-year-old Minnesota woman willfully violated the copyrights on 24 songs, and awarded recording companies $1.92 million, or $80,000 per song.

Jammie Thomas-Rasset's case was the first such copyright infringement case to go to trial in the United States, her attorney said.

Attorney Joe Sibley said that his client was shocked at the fine, noting that the price tag on the songs she downloaded was 99 cents.

She plans to appeal, he said.

‘Cash for Clunkers’ shifts into high gear

The Senate on Thursday passed a $1 billion effort to subsidize new auto sales by giving vouchers toward the purchase of new cars. President Barack Obama is expected to sign the bill. 

The “cash for clunkers” measure was attached to the $106 billion war spending bill that was approved by the Senate late Thursday. It drew some opposition from lawmakers who were opposed to spending more money on the auto industry.

The measure would give consumers vouchers worth as much as $4,500 to turn in gas guzzlers and buy new cars that are more fuel efficient.

Some GM dealers spared, GM jets not

Good news for a number of GM dealers - the bankrupt automaker is giving 60 dealers a reprieve after initially telling them their franchise agreements wouldn't be renewed this year.

Earlier this month, GM alerted more than 1,300 hundred dealers that they had to wind down their operations. The 60 dealers that are being spared were able to demonstrate that financial and performance data used by GM was inaccurate.

Separately, A U.S. bankruptcy court on Thursday granted a motion by GM to reject aircraft leases on seven corporate jets. The leases are from a division of General Electric, according to a copy of the court order.

Gas pains: Day 52

Gas prices rose 5-tenths of a cent overnight to $2.690. This is the 52nd consecutive increase.

In the last 52 days, the average price of gas has increased 64.2 cents or 31.3%. The average price of a gallon of gas is down $1.44 or 35.1% from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.052) and California ($3.028). The cheapest gas prices are in South Carolina ($2.509)


Filed under: Andrew Torgan • Economy
soundoff (8 Responses)
  1. james

    Why is Acorn to get public funds and we the tax payers not allowed to look at their books especially when they are all politics other groups can't wake up america

    June 21, 2009 at 5:05 pm |
  2. Pat R

    Mini-Madoff? Not hardly.
    Cash for clunkers.....puleeze.......
    OK.....how do I do that....make payments even on a 'cheap' new car...... buy a new car..... sure, just a minute, let me check my finances....in Michigan.....but, first, let me put some back for the health insurance I can't be sure of, life insurance, mortage for a house I can't sell, been here 22 years.....too little, too late. Oh, and the money I was encouraged to invest in Delphi & GM....sorry, pretty much gone. I'll contribute what I can...but I certainly can't buy a new car – so the taxpayer's money will go to ...... ? People who can afford a new car anyway? Just askin'.

    June 21, 2009 at 4:32 pm |
  3. David, Indiana

    @Cindy Are you suggesting that Wall Street bull and the woman from Minnesote could be partners in some weird song downloading ponzi scheme? Whatever that is. Anyway I think Bernie Madoff is in jail.

    On GM, I kind of wonder if there hadn't been such a fuss about the jets and the bailout had come along quicker, would GM be in a better position today? Also, how many of the 1300 dealers appealed to GM like the 60 who got reprieves?

    June 19, 2009 at 9:30 pm |
  4. Karen

    Ponzi Schemes by size:

    3) Allen Stanford

    2) Bernie Madoff

    1) U.S Treasury. (especially Social Security)

    Just you wait.

    June 19, 2009 at 6:03 pm |
  5. earle,florida

    This reminds me of the "Dark Ages" when a poor peasant stole a slice of bread to survive ,and was killed,or imprisoned in a labor camp for life (downloading a few songs?)! Wow, Kim Jong ll has nothing on the good-ole U.S.of A,....

    June 19, 2009 at 4:34 pm |
  6. JC- Los Angeles

    Rather than profiling yet another fraudulent American, how about taking a little time to find the one honest person left in our country and introducing him or her to your readers.

    June 19, 2009 at 4:25 pm |
  7. tradinghelpdesk

    Nice looking blog you have Mr AC. You can write well too. You should be in journalism.

    June 19, 2009 at 3:38 pm |
  8. Cindy

    Once again another nut bilking people out of millions. I just can't see how they can go on for so long and not be caught. I guess where there's a will there's a way! Too bad people are so corrupt these days!

    Man, that judge really socked it to the Minnesota woman in her copyrighting case. That seems a hefty fine to me too but she did steal the music so... I don't think it'll stop others from doing it though. Like I said...where there's a will there's a way.

    Cindy..Ga.

    June 19, 2009 at 3:18 pm |