Sponsor allegedly committed fraud
A raid by federal officials Tuesday at the offices of Stanford Financial leaves the future sponsorship of golf tournaments on the PGA and LPGA tours in doubt.
Federal offices alleged that the company has committed $8 billion in fraud, and there was a sign outside of its Houston offices saying, "The company is still in operation but under the management of a receiver,'' suggesting that company assets may be frozen.
Stanford is the title sponsor of the PGA Tour's long-running event in Memphis and also signed on last year to sponsor the LPGA's season-ending event in Houston.
It is another potential blow for both tours, which are dealing with the harsh economic realities facing the country. The PGA Tour has already seen U.S. Bank say that it will not renew its sponsorship in Milwaukee, while the Ginn Company has bowed out of its sponsorship of events on the PGA, Champions and LPGA tours.
PGA Tour officials quickly responded by saying that the Stanford St. Jude Championship in Memphis, June 11-14, would proceed as scheduled.
"We have no comment regarding the situation with Allen Stanford and certain of his companies at this time,'' said PGA Tour commissioner Tim Finchem in a statement. "However, we want to categorically state that the PGA Tour event in Memphis will be played as scheduled this year.''
It is unclear how the situation will affect the LPGA Tour.
"The LPGA has been closely monitoring the developments regarding the situation with Allen Stanford and some of his companies,'' said David Higdon, the LPGA chief communications officer in a statement. "We remain in close contact with our tournament owner of the Houston event sponsored by Stanford Financial, and they will continue to update us on any new developments related to this matter.''
The New York Times reported that the Securities and Exchange Commission accused Robert Stanford, the chief of the Stanford Financial Group, of conducting "a massive ongoing fraud'' in the sale of about $8 billion of high-yielding certificates of deposit held in the firm's bank in Antigua. The complaint accused Stanford and two associates with misrepresenting the safety and liquidity of the uninsured C.D.'s.
Bob Harig covers golf for ESPN.com.