A fund of hedge funds run by two members of Vice President Joe Biden's family was marketed exclusively by companies controlled by Texas financier R. Allen Stanford, who is facing Securities and Exchange Commission accusations of engaging in an $8 billion fraud.
The $50 million fund was jointly branded between the Bidens' Paradigm Global Advisors LLC and a Stanford Financial Group entity and was known as the Paradigm Stanford Capital Management Core Alternative Fund. Stanford-related companies marketed the fund to investors and also invested about $2.7 million of their own money in the fund, according to a lawyer for Paradigm. Paradigm Global Advisors is owned through a holding company by the vice president's son, Hunter, and Joe Biden's brother, James.
The fund has offered to turn over the $2.7 million investment it received from Mr. Stanford's firm in 2007 to a court-appointed receiver in the SEC's civil fraud case involving Mr. Stanford, according to Paradigm's attorney, Marc X. LoPresti. The fund terminated its relationship with Mr. Stanford's companies after the SEC filed civil charges against them last week, Mr. LoPresti said.
Mr. LoPresti, who represents Hunter Biden and James Biden, as well as Paradigm, said he didn't know which Stanford entity invested the roughly $2.7 million. He said the Bidens never met or communicated with Mr. Stanford.
"There is no connection between the Bidens and Allen Stanford or Stanford period, full stop," the attorney said. "There never was any meeting between any member of the Biden family, no phone calls, zero correspondence."
The vice president's office had no comment. A spokesman for Mr. Stanford referred calls to the SEC. A spokesman for the agency declined to comment.
The SEC accused Mr. Stanford of an $8 billion fraud centered on certificates of deposit sold by his Antigua-based Stanford International Bank. Mr. Stanford made large donations to an array of elected officials in recent years and provided some with trips to the Caribbean. |