Every scam is identical except for the details. That’s what I told myself around lunchtime on February 17, as I rushed to the offices of the Stanford Financial Group after hearing that federal marshals had just staged a raid. Like a lot of people in Houston that day, I’d learned most of what I knew about Robert Allen Stanford in the previous week or so: He was, at 59, a simultaneously flamboyant and secretive Texas billionaire and the owner, founder, and lone shareholder of a global network of financial service companies valued at $50 billion—an empire that stretched from Houston to Miami, Zurich to Mexico, South America to the Caribbean, and beyond. He now stood accused by the Securities and Exchange Commission of masterminding an $8 billion fraud, which was subsequently upgraded to “massive Ponzi scheme.”

The afternoon was cool and rainy, reminding me of grim, chilly December 2001, when Enron collapsed and so many employees were using their pricey Aeron chairs as dollies to carry out their belongings. I thought, momentarily, that Stanford’s fall was going to be déjà vu all over again. Here were the TV cameras, the bewildered shareholders, the shell-shocked workers, the stories of life savings vanishing into thin air—or into some rogue’s very deep pockets. But instead of two gleaming downtown office towers, there was an innocuous brick-and-limestone building sitting on the coveted 5000 block of Westheimer. Instead of folksy Ken Lay and evil genius Jeff Skilling, we had a megalomaniac from Mexia who went by the title “Sir,” even though he hadn’t been knighted by the queen of England but by some government official in the Caribbean.

When I reached my destination, I was reminded less of Enron than of those grainy, sped-up films I’d seen of bank runs during the Great Depression. I fell into line behind something resembling a Drive-through of Doom: People were easing their (mostly nice) cars up to the front of the building or sliding around the corner, leaving their flashers on, and racing to the entrance only to find a sign directing them to a Web site, stanfordfinancialreceivership.com, where they would learn the whereabouts of the college funds, trust funds, and inheritances they had invested with Stanford. Anyone who pounded on the glass doors got helpless shrugs from the uniformed guards inside. The words literally set in stone beside the door offered small comfort: “These companies are dedicated to the glory of God.”

The people who were not reporters wore the kind of blanched, dazed expressions you would expect at the scene of an airplane crash. “I’m in shock,” a small woman with a south-of-the-border accent and frightened eyes told me. “I’m hoping it’s not going to be another Madoff”—referring, of course, to Bernard Madoff, the onetime Wall Street titan who, as of late last year, is the king of the Ponzi schemers. She had pulled up in a pine-green Land Rover with an older man who was wearing a toupee; he sat in the car while she dashed out to get the Web site’s address. On the way back, she was surrounded by a flock of reporters whose dark umbrellas suggested wet, ravenous bats. She told them she had invested an inheritance with Stanford, which probably seemed like a good idea at the time. Until recently his was a quiet business. He didn’t fraternize with society types, and two years back he’d hardly made a blip on the business scene when he debuted at number 239 on the Forbes list of the 400 richest Americans.

This cluelessness meant that a great many people were stunned when the Stanford tsunami hit—when Houstonians discovered that Sir Allen was, until his downfall, the de facto ruler of Antigua and Barbuda; that last year he landed in a gold-leaf-trimmed helicopter at the hallowed Lord’s cricket field, in London, carrying what was purported to be $20 million he hoped to use to revolutionize the stuffiest and slowest of sports; that he claimed to be a relative of Leland Stanford, the founder of Stanford University, though school officials are unaware of any connection between the two; that he had donated more than $2.4 million to political campaigns in the U.S. and spent $4.8 million on lobbying over the past ten years; and that he had become such a close friend of Tom DeLay’s that the defrocked Houston congressman and former U.S. House majority leader flew on Stanford’s jets eleven times. What’s more, Stanford had had a sybaritic, reality-TV-show kind of life, complete with a yacht, mansions, one wife and many girlfriends, one long separation and many splits, children from various unions, and at least one impressive paternity suit. As a former employee put it: “He could be a point guard for the New York Knicks.”

Then the feds butted in. Stanford loyalists—including famed Houston defense attorney Dick DeGuerin, who has emerged as a possible savior—insist that missing the boat on Madoff caused the SEC to turn its guns on Sir Allen. True or not, he looks like a worthy target. There is less money at stake than in Madoff’s $50 billion scheme, but Stanford’s case is more global and more complicated. In pleadings released last February and March, the SEC accused Stanford of lying to investors, a violation of its rules. The agency alleges that Stanford’s companies falsely claimed their investments were safe, liquid, and in no way intertwined with Madoff’s. Mike O’Brien, a Stanford bank investor to the tune of $1 million and, unfortunately for Sir Allen, a successful plaintiff’s lawyer representing two whistle-blowers and a passel of angry investors, explains it this way: “He was investing people’s money but deceiving them about where it was going.”

Moreover, the SEC labeled the rates of return on one of Stanford’s heavily promoted investment vehicles “improbable” and “impossible” and noted that the company’s offshore bank claimed it had a “unique investment strategy” that allowed it to declare that its “diversified portfolio of investments lost only 1.3 percent in 2008, a time during which the S&P 500 lost 39 percent and the Dow Jones STOXX Europe 500 Fund lost 41 percent.” Stanford Financial’s hyper-growth in the past few years also suggested a need to bring in new investors to cover the returns going to the old ones—the classic definition of a Ponzi scheme. And no one could really figure out how Stanford made money. The supposed $50 billion enterprise was controlled by just two people: Sir Allen and his Baylor University roommate, James M. Davis, of Baldwyn, Mississippi, population 3,343. For a time, the two refused to tell the SEC a damn thing, even as the business’s assets were seized and placed in the care of a Dallas receiver, who had to inform one thousand Stanford employees all over the U.S. that they were out of work. At this writing, no criminal charges had been filed against Stanford or Davis, though it has been fairly well established that Sir Allen is the kind of guy who lies when the truth would serve him a whole lot better.

As with Enron, some claimed to have seen this coming. Most people who had dealings with Stanford tended to describe him in a similar way: “The guy has a huge ego,” or “He has an enormous ego,” or “The guy’s an egomaniac.” A few had turned and run when they were offered jobs at the company. Some potential investors hadn’t bought the assertion that Stanford Financial was a global investment juggernaut, especially those who did due diligence on the Internet and found references to previous SEC fines, deposits by drug cartels, the absence of a well-known auditing firm or a substantial board of directors, and the fact that the company was owned by a single shareholder who seemed to spend like, well, a stereotypical Texan. “The numbers didn’t make any sense,” a potential investor told me. “I didn’t see how they made money.”

Still others, however, in time-honored tradition, forked over their fortunes, using blind faith as their investment guide—including, perhaps, the woman in the Land Rover who now seemed to be collapsing into her powder-blue cashmere sweater. “What would you say to Mr. Stanford?” a reporter asked her. She glanced helplessly at her partner in the toupee before giving in to a bad day gone worse. “I hope you will do the right thing,” she replied. The corners of her mouth tightened, and she repeated herself. “Do the right thing,” she said, but this time it was an order. She leaned into one of many outstretched microphones as if to kiss it and added, “I hope nobody assassinates you.”

If you’re anything like me, you know this kind of thing happens over and over again, but you still want to know how this particular disaster occurred. Let me explain. First of all, in the age of excess that is just now vanishing before our eyes, many people came to believe that, regardless of income or achievement, they should be treated like masters of the universe. Sir Allen attracted thousands of clients and billions of dollars because he understood and exploited this desire brilliantly (probably because he wanted the same thing, but I’ll get to that later). The international press made him out to be a yahoo—a “flamboyant Texan” (Reuters), a “high flying Texas billionaire” (Financial Times)—but he was, in fact, a shrewd, calculating man who had given a lifetime of thought to his enterprise. Like Madoff, he wanted his clients to feel part of an exclusive club. But while Madoff exploited the provincial snobbery of Manhattan’s Upper East Side and his Jewish clientele, Stanford managed to draw people in by combining the style and values of Texas, Disney World, Hollywood, ESPN, and the Caribbean. “It was a really slick snow job,” attorney Mike O’Brien told me.

On the surface Stanford Financial stressed its allegiance to the conservative ethos of small-town Texas. In a 2008 edition of the Stanford Eagle, a lushly produced magazine sent to clients, Sir Allen wrote, “Although our world is far different than the world my grandfather lived in when the first Stanford company was founded back in 1932 and technology has dramatically changed the way we conduct business and further changed our world, the old saying ‘the more things change, the more they remain the same’ has never rung more true. As a company founded in the midst of the Great Depression—an environment of despair and negativity—we have a long-proven understanding of how even the most severe down cycles can bring opportunities that yield significant benefits in the long run.” To underscore the company’s dedication to tradition, individual pitch books came in gold-leafed, leather-bound portfolios.

But that was just the beginning. When you arrived at Stanford Financial’s headquarters, a guard would greet you by name and direct you to a parking place with your name on it. (Okay, they were magnetic letters. But it was your name.) Your financial adviser, wearing the requisite gold Stanford Eagle lapel pin, would be there waiting to walk you through the posh interior—mostly marble and mahogany, the universal signifiers of old money—to the Lodis room, an auditorium named after Sir Allen’s grandfather, the former barber who founded the family insurance business during the Depression. The lights would dim, and then you would watch a short film about Lodis and his values of honesty, integrity, and hard work. Then you might go to the “five star” private dining room. There might be just one or two other people there with their financial advisers, ordering up crème brûlée or a $275 bottle of Opus One.

If you or your group of investors had a net worth of at least $5 million, you got even more: a free trip on one of Stanford Aviation’s jets—there were six—from the impeccably landscaped hangar in Sugar Land to the island of Antigua to see the crown jewel, the Stanford International Bank. (Worried that your money was parked offshore? Why? At Stanford International Bank, you could cash out your CDs anytime, your financial adviser would tell you—just as you could at any U.S. bank. It was as liquid as the clean, clear Caribbean. And think of the tax advantages!) You were put up at the glamorous Jumby Bay resort, and a Stanford concierge arranged sightseeing tours. And, of course, you’d meet Stanford himself. At six four, he towered over just about everyone, and when he gazed at you with his deep-blue eyes, you felt like the only person in the room. He dressed like a billionaire, in natty bespoke suits or just the right kind of Caribbean-hued khakis and sport shirts. He talked about honesty and integrity while he embraced you in an LBJ-style bear hug, and you felt . . . confident. Secure. Safe.

If you wanted more, there was more. Could the company sponsor your son’s Little League team? Donate to your favorite arts organization? Stanford offered that, along with a team of research analysts from the world’s best schools (Harvard, Princeton) and the world’s best financial institutions (before they all collapsed). Then there were the returns. As of November 2008, Stanford International Bank’s CD paid 4.5 percent annual interest, compared with JPMorgan’s measly 1.75 percent, and that performance was as consistent as the Texas heat in August. Plus the head of the company was a knight. How cool was that?

Just as denial afflicted Stanford’s investors, so too did it strike employees (see Enron, circa 2000). Yes, some people who worked for Sir Allen loved the opportunities and the freedom he gave them, but many in upper management felt they were trapped in (a) an abusive marriage or (b) a real-life version of The Firm, John Grisham’s novel about a chillingly corrupt law firm. It’s hard to criticize a financial institution for seeming bush-league when the likes of Bear Stearns and Lehman Brothers have nearly brought the country to its knees, but Stanford Financial, up close and personal, wasn’t run much like a conventional investment firm. As at Enron, a great many people suspected that something was wrong, but because they were well compensated and—by design—working alongside relatives or close friends, they kept their concerns to themselves.

Sir Allen’s business was actually an agglomeration of many affiliated companies within the U.S. and overseas—a wealth management group, a trust company, a firm of financial advisers, a gold-and-bullion unit, and an offshore and onshore bank in Antigua, for starters—most of which were named after him and owned by him. He does not appear to be a man who liked to be challenged: The most formidable person on the advisory board of the Stanford Financial Group was Lee Brown, the exceedingly passive former mayor of Houston. Members of the board of directors charged with overseeing this multi-billion-dollar global enterprise included Stanford’s 81-year-old father, James—shrewd enough, but not exactly John Kenneth Galbraith—and Oliver Goswick, an old family friend who, at 85, is a former rancher and car dealer who continues to recover from a stroke.

And the executives? It’s hard to believe in retrospect, but working at Stanford meant answering to three people whose combined financial expertise probably wouldn’t have landed them a job at any Wall Street firm. Before joining Stanford Financial Group, in 1997, Laura Pendergest-Holt’s previous experience included the limited trajectory from Baldwyn High School, where she was student council treasurer, to Mississippi University for Women, where she was a math major, to Mississippi State, where she earned a master’s of science. By the time she was 31, perhaps owing to her closeness with her “visionary mentor,” Jim Davis, who had met her at the First Baptist Church in Baldwyn, she was Stanford Financial’s chief investment officer, overseeing its billion-dollar portfolio. Tall and willowy, with tawny-brown hair and a Southern girl’s radiant smile, she was good at pumping up the troops when she gave her financial reports. She was plenty smart and a very hard worker, so maybe she deserved the $700 bottle of wine that she was seen to order at a charity event, the designer clothes, the trips on a Stanford jet from Baldwyn to the Stanford office in Memphis, a distance of 91 miles. Maybe the temper tantrums were justified when her expenses were questioned. Maybe she was simply a woman of her time, which was excessive, after all.

If, as one Memphis columnist noted, Pendergest-Holt was like a character out of Theodore Dreiser, Davis was strictly from the pages of Sinclair Lewis: someone who appeared to be such a model of upstanding citizenship that he bordered on parody. White-haired and way buttoned-up—he spent six years in the Navy—the sixty-year-old chief financial officer underwrote a renovation of Baldwyn’s Main Street, which featured the Gotta Have It Quilt Shop and the Status Thimble. A leader in his church, he lived his evangelical Christianity at Stanford Financial every day, opening meetings with a prayer and quoting extensively from the Bible in e-mails. Even so, it was duly noted in Houston that when Mr. Davis—and it was always Mr. Davis, never Jim—visited from the Memphis office, he sometimes couldn’t be bothered to return the security guard’s greetings. Many employees agreed with a former executive who told me that Davis was so chilly and aloof that he “made the hair on the back of my neck stand on end.” His nickname was the Man Behind the Curtain, because he knew so much about the numbers, but in fact, he was something of an economics autodidact; no one could really say where he had developed those skills. All they knew was that you didn’t question him, because he had the undying loyalty of the Boss.

Speaking of whom: There was a time when Sir Allen hung around the Houston office, when he stopped to chat at people’s desks and worked out in the company gym. But as his millions turned to billions, he became both more reclusive and more mysterious. He loved the big corporate events, when he could light fires under his staff and brag about their success, but few besides Davis were allowed in close. People were admitted to his sprawling office on a need-to-know basis. And his personality cloaked the company in a climate of fear: He could be sloppily emotional at the smallest kindness, but he was more often quick to anger, known to hurl objects at employees who displeased him. No less than Davis sometimes seemed intimidated in his presence. “It was always better to tell him the truth,” a former employee told me, “because he had an instinct for when you were lying.”

As time went on, Stanford’s actions came to resemble those of a Hollywood star, or someone diagnosed with narcissistic personality disorder. His perfectionism could be defeating: The man could spot a smudge on a wall or a misplaced floor tile at twenty feet. He called employees at three in the morning to demand that they attend fifteen-minute meetings in a foreign country—and then he showed up late. He held up the filming of a company commercial until a particular restaurant employee who had left work for the day could return to hand him the bottle of Stanford water (he had them labeled that way) that was located six feet away.

With his energy and force of will, he could plate-spin in a wind tunnel. One day he might be in Washington, showing off with his billions, trying to convince legislators that there was a lot of good in offshore banking. (Former lieutenant governor Ben Barnes was one of about a dozen Stanford lobbyists.) Another day he and his lawyers would be battling in a fifteen-year fight to control Half Moon Bay, a stunning resort property that Antiguan officials had seized from its American owners to pay off government debts to Stanford. Rumors of money laundering had clung to him for years; he’d once written a U.S. ambassador to reassure her that many had tried but no one had found any evidence of wrongdoing. Outraged at any hint of unethical or criminal activity, he always struck back. “This has touched a very raw nerve in my body,” he once declared. “I have never in my life bribed or done anything illegal or unethical in my business endeavors.”

Then there were the women. After separating from his wife, Susan, in 1999, Stanford seemed to have one in every port—at least two in the Miami area alone. Keeping track of his wife and mistresses could be as confusing as sorting through his business entities. Before he tired of them, he graced them with chauffeured limos and Hermès bags. They jetted around on Stanford’s planes with their tiny dogs and their out-of-wedlock children (he shelled out $6,000 for teachers’ gifts at one private school for just two of his kids). “I just met your brother,” an employee told Sir Allen’s only legitimate daughter, after Stanford introduced the boy at a corporate event. “What brother?” she replied. You just didn’t go there.

Whether on matters personal or professional, then, Stanford trained his people to keep their heads down and their thoughts to themselves. “You could discern that one plus one didn’t equal two,” a still-frightened former employee told me. “If upper-level managers didn’t have their suspicions, they just weren’t sharp. People would ask, ‘How? How? How do we make all this money?’ ”

But no one ever asked the right people.

Journalists and Freudians can’t resist the defining anecdote, the one that purportedly explains all subsequent behavior. That’s why I ended up in Mexia, searching for a key to Allen Stanford. The town, east of Waco, is pretty much what you’d expect: The Wal-Mart on the highway has killed the town square, and only a few fine homes built during the oil boom of the twenties have survived. Despite the warmth of the people, it’s pretty parched, physically and metaphorically—you can see why Anna Nicole Smith got herself the hell out. Sir Allen’s mother moved away decades ago, after divorcing his father, and she now lives near Dallas. Because she took him with her when she left, few Mexians have clear memories of him as a boy. He wasn’t really there, which is something you could say for a lot of his life.

The squat gray building with a sign missing on the main street is the former Stanford Financial office. When I visited, James Stanford was still working there, in a dark-paneled room with English hunting scenes on the wall. His hair is thinning, and he’s stooped from a debilitating illness, but he’s very sharp and intensely loyal to his son. “This is no Ponzi scheme,” he insisted. Stanford’s mother, Sammie, who notes that Allen spent 25 years building his businesses, is sticking by him too. “I cannot believe that the federal regulatory agencies or anyone else has the right to destroy everything just at their discretion,” she told me.

Theirs was not a happy marriage. James was from a conservative old family—they lived on South Ross Avenue, the best street in town—whose money came from insurance and real estate. Sammie’s father was an oil field worker who traveled as far as Cuba with his family and, when times got tough, moved everyone back to live with relatives in Mexia. They married young, and tensions arose fairly quickly, as Sammie failed to win acceptance from her mother-in-law. Things didn’t improve when she went to work for a local attorney. This was Texas in the fifties—women weren’t supposed to work, and James Stanford had a wife who wouldn’t settle down.

By the late fifties Sammie was divorced with two sons, Allen and his younger brother, Reid, and was working as the society writer for the Mexia News. Every day, in what must have been another affront to her snobbish ex-mother-in-law, she visited the town square with her clipboard to record news of the latest weddings, parties, travels, and visitors. But when Allen was nine, she left town with her boys and settled in Fort Worth. Sammie says Allen was “spoiled rotten because he was such a beautiful baby,” which might explain why he appeared to move through this period with little difficulty, but again, this was Texas in the fifties. Whatever scars he carried would never have been allowed to show.

Allen reconnected with the Stanford legacy every summer, when he went back to Mexia to live with his father and to visit his mother’s parents. In that town he was somebody—the offspring of a venerable family. He grew tall and strong, and he worked hard, like all good ol’ boys do. He baled hay, drove tractors, laid railroad ties. “Every job he had was a man’s job,” Sammie told me proudly. “He wasn’t happy flipping burgers. He would never work for Dairy Queen. He had more on the ball than that.” According to James, Allen also raised hell, chased girls, and did well enough in school without really trying. “Women liked him—I think too much,” James told me.

In his father’s eyes, Allen was “a born dreamer,” and it’s hard to think those dreams weren’t about combining the Stanford cachet with his mother’s ambition. (“Be the biggest, be the best,” he always urged his employees.) The key to that might be located in Mexia too. The Stanfords lived in a modest ranch house on the corner of South Ross and East Tyler Street, but across the street was a castle. It belonged to the Dillard family, investors and oil people who held court in the kind of sprawling, faux-Tudor structure that so many newly rich Texans built in the twenties. It was easily the biggest, grandest house in town, and Allen used to play there as a child with the young scion of the Dillard family, who, according to Sammie, “had every toy imaginable.” Something about that big house looming right across the street from a child who’d been both indulged and deprived—maybe he’d grown up thinking that with a place like that, he’d show everybody. Or maybe he thought it was his due.

What Allen lacked, though, was follow-through. He managed to graduate from Eastern Hills High School, in Fort Worth, but attended several area colleges before landing at Baylor. The story told around Stanford HQ was that he saw a note on a bulletin board advertising for a roommate, showed up at Jim Davis’s apartment, and the rest was history. “They were two cheesy mustaches going through the seventies,” a former fixed-income trader at Stanford, Charles Satterfield, told me. Allen majored in finance—the New Yorker has reported that he did not play on the football team, as he has claimed—but really focused on his first entrepreneurial venture, teaching scuba diving, an activity that won him a free trip to the Caribbean.

After earning his degree, in 1974, Stanford bounced around for a year or so and then married Susan Williams, a pretty, dark-haired girl from Teague who was working as a dental hygienist. The wedding was big news in Mexia, as was a shower held for the bride, whose colors were brown and yellow. The society page of the Mexia News reported, “Crystal appointments held nuts and mints and silver trays carried pressed yellow cookies with brown centers.”

Allen moved to Waco with his new bride and opened up a health club—not a bad business for someone who had spent much of his life in physical pursuits. But it didn’t work out so well: Like a lot of people in the early eighties, he expanded too fast, and by 1982 the business was in bankruptcy. At 32 he faced more than one hundred creditors. Two years later he and Susan filed for personal bankruptcy, with $13.6 million in debts and $229,735 in assets. Around that time he became involved with a woman who worked for him and, eventually, had a child with her. (This is a good place to drop Dreiser and Lewis and bring in Dr. Phil, who likes to stress that the best predictor of future behavior is past behavior.)

The events of the next ten years were nothing short of miraculous. After the health club collapse, Stanford created Stanford Financial with his father. The family insurance firm had been sold (that’s right: there’s no direct business line between grandfather Lodis and Allen), and they began buying, refurbishing, and reselling Houston and Austin real estate, mostly apartment complexes, which were going for cheap because of the oil bust. James told me that Allen’s search for investors took him to Florida and the Caribbean, where he was inordinately successful: He raised so much foreign dough that he couldn’t find places in Houston to sink it all. By then Allen had brought his old friend Jim Davis aboard, and the two men got an idea. Partnering with James, who put in $6 million, they decided to open an offshore bank in Montserrat with a soothing if unoriginal name: Guardian.

Offshore banks aren’t like regular banks. They don’t take deposits from or lend money to anyone who walks in the door; instead they offer particular depositors extreme privacy (foreign governments have no jurisdiction), tax advantages (hence the term “offshore”), and, sometimes, exclusive investment opportunities. They are especially attractive to Latin Americans—a clientele Stanford pursued relentlessly—whose currency and political situation remain extremely volatile. (Rich Venezuelans living under the Chávez regime are among the most eager.) Historically, offshore banks have also been very popular with divorcing spouses, drug dealers, money launderers, and tax evaders.

Guardian was a success. By 1986, a scant two years after filing for bankruptcy, Allen Stanford was back on his feet, with a reputation as an international man of mystery. “Everyone was suspect of their operation,” recalls a Houston developer.

What happened next is the subject of some debate among Stanford watchers. Perhaps Montserrat changed its banking laws or Stanford drew the attention of the IRS or he got into a fight over a woman or a hurricane wiped out much of the island—or maybe all those things happened. Ian Moncrief-Scott, a financial writer who has covered Caribbean corruption for several decades, claims that the British government “was asked by the Montserrat authorities to force him to leave, which it did.” Whatever the case, Stanford arrived in Antigua in 1991. This time he named the bank after himself.

My worry, upon landing in Antigua in March, was that I’d have no idea how to find the properties belonging to Sir Allen Stanford: the banks, the cricket field, the newspaper, the restaurants (one of which, for those keeping an irony tally, is called the Sticky Wicket). I needn’t have worried, because the minute my taxi driver pulled out of the airport, we were in Stanfordville, a pristine, landscaped, no-expense-spared enclave complete with an observation tower that provides a view of the entire island. Unfortunately, I was blocked from ascending it by a security guard—fear of retaliation since the Stanford bank’s collapse—but I was told that Antiguan schoolchildren visit on field trips.

I did, however, see other Stanford highlights as my stay unfolded, including the hilltop manse, complete with basketball hoop, where Sir Allen parked his wife and the colossal white airline hangar that is right across from the Architectural Digest-worthy dock for his 120-foot yacht, Sea Eagle. (Stanford often flew to Antigua and then cruised to his mansion on St. Croix, which used to belong to Victor Borge.) I also saw the neighboring island where Sir Allen was planning to build a luxury development that most likely will never happen. Nearby, tourists could pay to swim with stingrays, a nice metaphorical touch.

Virtually every person on Antigua, all 69,000 of them, seems to have an opinion about Sir Allen. On the one hand, I was told, he did a lot of good on the island, which, despite its status as a tourist destination, is home to grinding poverty. The largest private employer, he made a lot of upgrades—“He did everything first-class,” I heard many times—and he was known for extravagant acts of charity, the most famous being his airlifting of a Catholic priest, who was supposedly bleeding from stigmata, to the U.S. for medical treatment. (Stanford, as was first reported in the Houston Chronicle and then just about everywhere else, described the incident as “a major personal event in my life” and reportedly carries a vial of the Holy Father’s fluids with him at all times.) On the other hand, Stanford’s detractors point to his refusal to use union labor—abhorrent to Antiguans, because trade unions liberated them from British rule—and his tendency to throw his weight around when he didn’t get what he wanted. “We call him Cry Cry Baby,” one of my many opinionated cabdrivers told me. In fact, Stanford’s relationship with Antigua mirrors most of his relationships elsewhere, in which he renders those closest to him dependent on his largesse and, not coincidentally, under his near-total control. (When Stanford’s wife visited Antigua, she was allowed to go only certain places and was always escorted by security guards, ostensibly to protect her from kidnapping but also to prevent an encounter with one of his girlfriends.)

In truth, Antigua and Sir Allen were made for each other. “You are used to Texas-style chicanery, which can be both big and bold, but you have never seen anything like Stanford’s influence in Antigua,” Robert Coram, who chronicled Antiguan corruption in his book Caribbean Time Bomb, told me. Built on the backs of African slaves imported to work on sugar plantations during colonial times, Antigua next became a haven for pirates and later, after achieving independence from the Brits, in 1981, a refuge for everyone from gunrunners to money launderers. (Among those who fled there was financier Robert Vesco, who was charged with securities fraud in the seventies—and bore an uncanny physical resemblance to Stanford.) As often happens in developing countries, the liberator of Antigua, V. C. Bird, eventually became its dictator, and his sons, Vere Junior and Lester, were no less authoritarian (Coram compares them unfavorably to the Duvaliers of Haiti). The ties between Lester and Sir Allen were formed with the latter’s move to the island in 1991. Once Lester became prime minister, three years later, Stanford’s success was assured. “He was just like a pig in slop,” according to Mike O’Brien.

“I love this place and its people,” Stanford soon proclaimed, and you could understand why. Along with founding the Stanford International Bank, which by 2000 had $830 million in assets, Stanford eventually took over the Bank of Antigua and so became the person who lent money to, well, just about everybody, including the government. “His modus operandi, which he copied from Montserrat, was to get the local government in his debt and then press them for real estate and other favors,” Moncrief-Scott told me.

Antigua has long been known as a place where all kinds of rich people can have their privacy—Robin Leach, Eric Clapton, and Oprah Winfrey have homes there—but the exponential growth of its offshore banks also made it even more of a refuge for serious criminals (it was, for instance, a favorite of the Russian mob’s). In 1996 Lester Bird gave Stanford the job of cleaning up the country’s banking laws and helping him lobby the U.S. for better standing, which was a little like asking a fox to guard the henhouse, but by most accounts Stanford did his job. “This is not play school,” Stanford told the Houston Chronicle in 2000. “This is a rough-and-tumble business.” In local parlance he was Antigua’s “lender and spender,” providing money for civic projects, getting ahold of choice pieces of real estate through his relationship with the prime minister, not quite ducking confounding conflicts of interest. It was business as usual on Antigua, so few bothered to complain. “We caught him giving money to politicians before the 2004 election,” Winston Derrick, the owner and publisher of Antigua’s Daily Observer—the newspaper Stanford doesn’t own—told me proudly. “We published the checks.”

Faced with suspicion, Stanford liked to suggest that people were just jealous. Of course, he did surrender $3 million in 1999, when the Drug Enforcement Administration discovered that the Juárez drug cartel was laundering money through its accounts at Stanford International Bank. That same year, Texas securities regulators alerted the FBI and the SEC to potential money laundering by Stanford, but nothing came of it.

He was living large, really large. Along with nearly unimaginable public displays of wealth, there were very public displays of affection. Sir Allen’s long-suffering wife, Susan, and their daughter remained in Houston while he had two children with one new mistress and two more with another one, bringing the total of Stanford heirs to six. Both girlfriends—or “outside wives,” as a British tabloid called them—lived in the Miami area, so he was traveling quite a bit between there, Texas, and the Caribbean. The luckiest girlfriend, Louise Sage Stanford (she took his name, though they never married), found herself mistress of Wackenhut Castle, a 57-room mansion in Coral Gables outfitted with Old English accoutrements, including a suit of armor and a moat. (The place had been previously owned by a former expert in security and prison management.) Just as Stanford’s homes were all identically decorated like English castles, Stanford’s women bore striking resemblances to one another. They were all small, with pert faces, long dark hair, and pretty, proportional figures. Maybe, when you are as busy as Allen Stanford, no surprises is the only way to go.

One question always comes up when people are accused of being scammers. Assuming they’re guilty, you have to wonder: Did they set out to be crooks, or did they get in a bind and make one misstep, promising never to do it again, and then make another and another? It’s hard to find the answer, because the narcissist you meet on the way up is the same narcissist you meet on the way down. Some years back, before he was sent to prison for a very long time, Jeff Skilling told me that Enron collapsed because of a run on the bank. And because of short sellers. He also said something about Jim Cramer, CNBC’s infamous whack job. People who run billion-dollar businesses are thrilled to take the credit but loath to admit mistakes.

To better understand what happened to Sir Allen, I met up with two former employees, Charlie Rawl and Mark Tidwell. Both men are affable, open, and circumspect. Rawl is 49, blond-haired, blue-eyed, and intense; he sports humorously embroidered suspenders. Tidwell’s hair is prematurely gray; at 40, he’s almost preternaturally easygoing, despite an unbridled passion for Swiss watches. Their good reputations in Houston’s investment community were of long standing, but for various reasons, both men were unhappy in their jobs, and the more they learned about Stanford Financial, the more interested they became. They perceived it as an independent boutique firm where they could give their clients exceptional service. Stanford’s management assured them that if things did not work out, they would be able to negotiate an easy exit. “We’re not a wire house,” they were told, a reference to bloated corporate investment chains. In 2004 and 2005, respectively, they signed on as financial advisers, bringing hundreds of clients with them.

Within months of their arrival, the company began to change. In particular, management began a vast and aggressive expansion, the goal of which was to increase the number of financial advisers from fewer than forty to more than two thousand by 2007. Another goal was to push its new advisers to encourage their new clients to invest in Stanford’s number one product: a certificate of deposit unlike the kind you could get at a regular bank, the kind that pays low but steady returns. This CD, which had been offered by Stanford for more than a decade, was based offshore, in Antigua, and boasted remarkably consistent returns that were 3 percent to 4 percent higher than those available in the U.S. For the advisers, the CD offered substantial advantages as well. Rawl’s supervisor, Jason Green, president of Stanford Financial’s private clients operations, would tell advisers that they could make 30 percent more selling CDs at Stanford than in their previous jobs. The race was on: Advisers who were close to qualifying for their quarterly bonuses “were gonna put their mothers in there, their grandmothers in there, and maybe a schoolteacher who’s not qualified,” Rawl told me. Plus there were individual and global competitions with hefty bonuses for teams that sold the most clients on the CD—the Eurostars competed with the Mexican Aztec Eagles, for instance, for millions of dollars in rewards. In fact, the CD was so remunerative that the money earned by advisers who sold investors on it was nicknamed “bank crack.” Even clients involved with the Stanford Trust Company, based in Louisiana, were advised to purchase Stanford CDs with money from their IRAs. It was that safe!

But Tidwell and Rawl had questions. Why, for instance, was the auditor of a bank with a supposed $8 billion in assets a one-man firm located over a hair salon in London? When Tidwell asked permission to notify clients who had invested in the CD about forms they were supposed to submit to the IRS, he was told by a supervisor to forget about it—the company didn’t give tax advice. Why worry clients who might already be anxious about being offshore? Sometime later, Tidwell and Rawl learned that Stanford didn’t issue 1099 forms to clients so that they could report the value of their investment income to the IRS. Collecting that data was supposedly the client’s responsibility.

Then, in May 2005, all of Tidwell’s clients received letters from the SEC seeking information about Stanford International Bank ’s CD program. Management assured employees that this was “routine,” but Tidwell and Rawl were extremely concerned when, in the summer of 2006, assistants to the company’s financial advisers were told to remove any information that wasn’t on Stanford International Bank letterhead from their client files: all client notes, interoffice e-mails, and so on. Both men wondered why this information was being removed just before the SEC was to inspect the files.

Also around this time, clients in a Stanford mutual program started calling to complain that the returns they were getting weren’t matching the returns the company was claiming in its pitch books. And there was one more thing: The Stanford Trust Company was a disaster. The head of that business had just been fired, and executives charged with cleaning up the mess were appalled. What should have been Stanford’s safest, most conservative division—trust companies usually are—was referred to internally as a “toxic waste dump.”

Rawl and Tidwell pressed for answers but got none. Finally, in March 2007, management called a meeting with all of their financial advisers. The first order of business: Advisers should stop enumerating their concerns in e-mails. “I just don’t want the SEC or somebody to pull that out and go, ‘What in the world’s going on,’ ” a supervisor insisted. A consultant had also been hired to go through the books, and the news was not good: He urged the company to admit that the returns they were claiming prior to January 2006 were incorrect. “All bets are off as far as accuracy goes,” he said, “and no one can even verify it.”

No biggie: In 2007 Stanford paid a $20,000 fine to the SEC for failing to meet the required debt-to-liquidity ratio. That same year it paid a $10,000 fine to the Financial Industry Regulatory Authority after being charged with giving out “misleading, unfair, and unbalanced information” about its CDs. But that was it. No internal changes were made, except that one of the people who, in Tidwell’s and Rawl’s eyes, had been responsible for the problems received a big promotion. Stanford’s now demoralized compliance department—responsible for making sure the company followed the rules—coined a new term: FUMU, for “fuck up and move up.” “I knew it was only a matter of time before the regulators started hammering us,” Rawl told me. Of course, their clients were being put in harm’s way as well. The two men began frantically planning their exit.

On December 14, 2007, Tidwell’s supervisor, Jay Comeaux, the silver-haired star of Stanford’s late-night TV commercials, called him in because he had heard that Tidwell might be leaving. Tidwell admitted as much, citing the problems in the mutual fund and CD program as well as the company’s lack of compliance with federal guidelines. He wanted to transition out, he told Comeaux. A few days later Rawl announced he intended to resign. Comeaux asked for his reasons. “If you want me to, I’ll put them in writing, but I don’t think you want me to,” Rawl told him. Indeed, Comeaux did want his resignation in writing. “He regrets that today,” Rawl told me.

Rawl went home and, after consulting his attorney, Mike O’Brien, drafted a letter that contained the same complaints that Tidwell had made previously and that he had voiced to his supervisors, including the destruction of documents in the midst of the SEC inquiry and the firm’s continued use of false returns. A few days later, on December 21, Rawl got a FedEx letter from Comeaux while preparing for a family Christmas party. Setting the record straight for himself and, presumably, Stanford’s attorneys, Comeaux wrote that Rawl had not resigned—he had been terminated. Also, Comeaux had never asked him to put his concerns in writing. And they were completely unfounded. “I couldn’t believe they would lie,” Rawl said. “But it was just the beginning of the lies.”

Within days, the two men found their joint brokerage accounts at Stanford frozen and a whispering campaign launched against them from within. Tidwell and Rawl were nothing more than “disgruntled employees” whose claims were “totally without merit.” Then Stanford sued them, claiming Tidwell and Rawl owed a combined total of more than $600,000 to repay draws they had been advanced when they were hired. They were stunned: “The last thing we wanted to do was fight,” Rawl told me. “We knew we couldn’t afford it.” But they did, filing a countersuit in January 2008, claiming that they had been forced to commit illegal acts on behalf of the company. In July they were subpoenaed by the SEC. By then, they had gotten most of their clients out of Stanford.

And then—nothing.

A month before, Stanford had pulled off the most successful publicity stunt of his life by landing at Lord’s in his golden helicopter with the $20 million in cash. The money, displayed in a Plexiglas box, was to be bestowed on the winners of an international cricket tournament to be held later in the year in Antigua. (For Stanford, it was the culmination of a dream: He had embraced cricket in 2005, when he had visualized its global marketing potential—linked with the Stanford name, of course. In just three short years Sir Allen and his feisty Caribbean team were known to cricket fans all over the world—and roundly despised by the British, who hated the shorter version of the game he was promoting.)

In September he jumped to number 205 on the Forbes list. Almost simultaneously he was chosen as World Finance magazine’s Man of the Year. “The Stanford philosophy for investing is based on diversification across global regions, countries, markets, asset classes, products and sectors with the assumption that risk can be minimized while maximizing returns,” he said in his celebratory interview.

In November Sir Allen’s cricket team, handpicked from among the best of the Caribbean and known as the Stanford Superstars, clobbered the team put together by the British. He settled a paternity suit. He remained undivorced, though his wife had filed in 2007. And when the Madoff scandal broke and some Stanford investors asked about possible links, they were assured: No way.

In January 2009 there was more good news. At a meeting of their top performers, Sir Allen, Jim Davis, and Laura Pendergest-Holt claimed, to much applause, that the bank was stronger than at any time in its history. Why, just two months earlier they had received a capital infusion of $541 million!

But trouble was brewing elsewhere in the empire. That same month, a respected Venezuelan-born blogger named Alex Dalmady published an article about Stanford in the journal Veneconomy. He stated, essentially, that Stanford’s bank was a sham, its returns “on the limit of the credible universe.” Within weeks, BusinessWeek and Bloomberg were on the story, just about the same time the SEC was closing in.

Financial collapses, as no one needs to be reminded, happen very quickly, and the weaker the entity, the quicker the collapse. When the SEC came calling with subpoenas in January—around the same time as that cheery meeting—Stanford and Davis refused to cooperate. The SEC, after all, couldn’t prosecute criminally; it could just haul them into civil court. They chose to send their chief investment officer, the charming Pendergest-Holt, and another bank executive who had also been subpoenaed to provide sworn testimony about Stanford Financial Group and the Stanford International Bank. A lawyer for the businesses told the SEC that Stanford and Davis were not micromanagers but delegators. Their appearances, at this point, weren’t necessary.

Still, this was very complicated stuff, even for a chief investment officer. The SEC suspected the company had fabricated the performance of the bank’s investment portfolio in its annual reports, that its financial statements were “fictional” and “reverse engineered” to reflect more income than it had earned, that it had falsely claimed a $541 million infusion of capital the previous November. (Sir Allen suggested the money had come from investors in Libya.) The SEC was also looking hard at the bank’s claim that its portfolio was highly diversified and overseen by a team of well-trained research analysts. As a Stanford lawyer explained in an e-mail to the executives, the agency wanted to be reassured that “the bank is ‘real,’ the CDs are ‘real,’ that the money is actually invested as described in our documents, and that client funds in the CDs are safe and secure.”

During the first week of February, the prep sessions for Pendergest-Holt began at Stanford Financial’s Miami office. Present were the Stanford attorney and five other still-unnamed executives from the Stanford International Bank, including the president. The latter gave a very detailed presentation about Antiguan banking regulations, which was probably interesting enough, but he never quite got around to explaining where the Stanford International Bank was parking its assets.

On February 4 one of the bank executives who had been present at the meeting e-mailed Davis. “I am confused,” he began. Supposedly the bank had received that $541 million shot in the arm the past November. But the only capital infusion he could find was a transfer of real estate, valued at only $88.5 million, from one Stanford company to another.

Later that day Pendergest-Holt met with Davis, the attorney, the bank president, and three other executives back in Miami. The bank’s assets were contained in three tiers, she explained; her presentation focused on Tier II, which was valued at $350 million, down from $850 million in June. This news was shocking to many in the room. Davis, according to an FBI affidavit, did not look surprised at all.

Then, with Davis’s help, Pendergest-Holt moved on to explain just what kinds of assets were contained in Tier III, the one the SEC would allege held 80 percent of the bank’s vaunted $8 billion. Instead of anything close to that, Pendergest-Holt could show only $3 billion in real estate and $1.6 billion labeled as a “loan to shareholder.” That shareholder, it soon became apparent, was Sir Allen Stanford. Viewing the slide, one of the men in the room felt as if he had been kicked.

So, the bank president asked—slowly, I would assume—if the presentation was accurate, then Stanford International Bank was . . . insolvent? Flush with this insight, he told the group he couldn’t testify before the SEC because the information he had previously given out was very different from the information he was now getting. That is, he had unwittingly misled his investors.

Not surprisingly, another meeting followed the next day. This time Sir Allen showed up at the Miami office, along with Davis, the lawyer, the bank president, and the three other executives. Two of those executives announced their intention to report the company’s problems to the SEC. In a fury, Stanford began pounding on the table. “The assets are there!” he screamed. The meeting was adjourned.

They met the day after that, but the general mood was no better. The president of Stanford Financial started weeping before Pendergest-Holt could even begin her presentation. “If you are going to go through more information I didn’t know,” he cried, “I don’t want to be there, and I’m going to the authorities.” The attorney walked over to him and suggested they begin to pray. Sir Allen remained resolute: The Stanford Financial Group, he insisted, had at least $850 million more in investments than liabilities. A few hours later the attorney walked into one of the executive’s offices and announced, “The party is over.”

Not quite. On February 10 Pendergest-Holt arrived at the SEC’s offices in Fort Worth to give sworn testimony. She was asked whom she met with to prepare for her appearance. She did not mention the attorney, Sir Allen, Jim Davis, or the others who had attended the Miami meetings. Instead she said, “I have been to Antigua. I have reviewed statements and looked through, gosh, other issues . . .” Asked about the assets contained in Tier III, well, she didn’t know where they were—when she needed to know about Tier III, she would ask either Davis or Stanford. Asked whether the Stanford International Bank ever gave out any loans, she replied that it did but that she didn’t know the details. Pressed on Tier III again, she started losing patience. “I do not know,” she said. “I can state it as many ways as you would like me to. I don’t know about Tier III, other than what I’ve already shared with you in about twenty different ways.”

The SEC questioned her one more time, on February 17. Asked again by an agency attorney whether she knew about the assets contained in Tier III, she said, “If I knew anything about Tier III, I’d tell you. God’s honest truth.”

If you were a Stanford investor while all this was going down, here’s what might have happened to you. A woman I know named Sascha Jordan opened an account with Stanford Financial about three years ago, putting about $50,000 into a CD. On February 14 she called the company’s Houston office and asked the operator to connect her with a broker who could sell her another CD.

“We aren’t taking any deposits,” a broker’s assistant told her. Something in the assistant’s voice made Jordan anxious.

“Well, is my CD okay?” she asked.

“I’ll have a broker call you on that,” the assistant responded.

A few days later, on February 17, Jordan got the news that the SEC had accused Stanford of perpetrating “a massive, ongoing fraud” and that her money was frozen for who knew how long. The SEC claimed that the money that was supposed to be going to liquid investments was tied up in real estate and private equity, that there were links to Madoff investments, that most of the financial figures were made up. In other words, Stanford executives had allegedly lied and lied and lied again, all in service to the Ponzi scheme. Employees of Stanford Financial were herded by marshals into the Lodis room and told to leave without taking one thing with them.

Most of the rest you likely know, thanks to the business press, the British tabloids—the Mail on Sunday was relentless—and everything in between. Investors remain paralyzed because the Dallas receiver is, at this writing, showing little inclination to release Stanford’s personal assets or those of his companies. Pendergest-Holt earned the distinction, on February 26, of being the first Stanford associate charged criminally, for obstruction of justice. Davis lawyered up in March and agreed to cooperate with the authorities. According to his attorney, he was “devastated, because he knows a lot of good people got hurt.” Davis further claimed, through his attorney, to be the one who “blew the whistle and brought the whole house of cards down.” (“Jim Davis never ought to meet Allen Stanford face-to-face,” said James Stanford.)

As for Sir Allen, his crazy situation has become even crazier. CNN reported in February that he attempted to flee the U.S. from the hangar in Houston, but the pilot he tried to hire wouldn’t take his credit card. Instead Stanford went with his current girlfriend to Virginia, turned himself in to the FBI, and surrendered his passport. The IRS wants more than $220 million in back taxes. He has spent the past few months in a desperate search for an attorney who will agree to represent him, even though he has no access to his money—assuming, of course, he has any. (Dick DeGuerin has pointed out to the press that he doesn’t work for free.)

Stanford has become a punch line—the clip of him telling a CNBC reporter that it was fun to be a billionaire aired on The Daily Show and then went viral—and a source of ever more paranoid theories. Deep into the Internet, you can find stories that link him to the Russian-Israeli mafia and plots to overthrow the leaders of Venezuela, Bolivia, Ecuador, Argentina, and Nicaragua. He is even said to be a CIA agent whose planes might or might not have been used for extraordinary rendition.

When Stanford finally broke his silence, it was to plead for a release of some funds and, more important, to declare his innocence. That news broke on April Fools’ Day.