State Rep. Fred Mills, president of Farmers-Merchants Bank & Trust, says he has no business relationship with Stanford Group Co. A few years ago, Fred’s brother Henry J. “Hank” Mills helped launch the River Ranch office of Stanford, an affiliate of Antigua-based Stanford International Bank now under federal investigation for fraud. Fred says any introductions he made for his brother in town were purely social, and that his bank had absolutely no connection with Stanford.
“We’re under FDIC and OFI regulatory constraints that prohibit any situation whatsoever not contractually approved by the regulators,” says Fred, whose Breaux Bridge-based bank recently opened a branch in Lafayette. “We would never do that, and we’re not allowed to do it. In fact, I was very conscious not to comingle any of those relationships. I was very cautious not to even have the appearance of that.”
The Securities and Exchange Commission charged Stanford with fraud in connection with $8.5 billion in so-called CDs that promised unrealistically high interest rates and is also investigating the historical performance of $1.2 billion in mutual funds. Based in Houston, Stanford Group Co. moved into Louisiana in 1996, opening its first satellite office in Baton Rouge.
In 2007, Stanford claimed to manage nearly $2 billion in assets from its two Louisiana offices and up to $50 billion company wide. Hank Mills, prevented from commenting due to a federal gag order related to the investigation, joined Stanford as a vice president/financial adviser in Baton Rouge in 1997 and subsequently helped establish the Lafayette branch. “I don’t think [Hank] had any suspicions [of fraud],” says Fred. “He’d been with them for so long.” The state rep adds that his brother attempted to contact any investors whose accounts he managed prior to the gag order. “I think as soon as the regulators allow [public] comment, he would love to do that.”
in case you missed it