Stanford leaves cancer patients waiting for millions

BOSTON (Reuters) - A world-renowned U.S. hospital dedicated to treating children with cancer for free received millions in aid from billionaire Allen Stanford, raising the hope that there would be millions more.

Stanford Group Co, reputed for corporate giving, was a multimillion dollar donor to St. Jude Children's Research Hospital in Memphis, Tennessee.

But after Stanford was charged this week with an $8 billion fraud, staff at the cancer hospital realized that millions they were expecting from Stanford might never arrive.

"We were shocked, and we were surprised," said hospital spokesman Jerry Chipman, adding that he tried to get information about the implications for the hospital after reading that a judge had frozen Stanford's assets.

The hospital treats all patients for free and relies heavily on private patrons to raise money for salaries, procedures, and transportation and lodging for patients and their families.

"We hate to lose any of our corporate sponsors, especially considering that it costs over $1 million a day to run the hospital," Chipman said.

For charities, news of the allegations against Stanford, whose whereabouts are unknown, comes at a difficult time. Only two months before, Wall Street investor Bernard Madoff was accused of a $50 billion fraud that forced some charities to close and left others with massive losses.

As a businessman, Stanford spread his wealth around, becoming prominently associated with a range of sports that are now left facing a gulf in their funding. He made gifts to schools, libraries and rescue relief in the Caribbean. Stanford International Bank (SIB) is based on the West Indies island of Antigua.

Stanford, who was knighted on Antigua three years ago, underwrote the Sir Allen Stanford Pediatric Fellowship Program with one million Swiss francs.

In a nod to his company's many investors in Latin America, Stanford supported Latin American art exhibits at Houston's Museum of Fine Arts. And when golfer Camilo Villegas endorsed Stanford Financial Group, the company promised to help establish a foundation in the golfer's hometown of Medellin, Colombia.

FAST AWAY THE MONEY PASSES

Only a few weeks ago, the fifth generation Texan boasted about his company's generosity to St. Jude Children's Research Hospital in an internal report with pictures of him touching one patient and holding another on his knee.

The photos contrast with the image of the business mogul who favors yachts, helicopters and private planes to move around the world.

"St. Jude Children's Research Hospital has been Stanford's corporate charity of choice for three years, and our partnership has raised over $15 million for the hospital during that time," Stanford wrote in the 2008 edition of the Stanford Eagle, a glossy company magazine.

But St. Jude's has not received the $15 million Stanford wrote about in his report, Chipman said.

"We have received $8 million from them in two years, 2007 and 2008," Chipman said. He speculated that Stanford's statement in the magazine might have anticipated this year's contribution.

Chipman said Allen Stanford toured the hospital once and donated the first check, but Stanford did not attend the ceremony to hand over the second check.

While the hospital could use the extra $7 million from Stanford, Chipman said it has been assured that the golf tournament where Stanford raised the money he donated to the hospital would go on as planned this summer with a new sponsor.

Chipman said the hospital counts retailers Target, CVS, Williams-Sonoma, FedEx, and Domino's Pizza among its corporate donors.

The U.S. Securities and Exchange Commission has accused Stanford of fraudulently selling $8 billion in certificates of deposit with impossibly high interest rates from his Antiguan affiliate SIB in a scheme that stretched around the world.

"Any company can simply donate to a favorite charity," the company wrote in its magazine. "But in true Stanford style, we like to structure our corporate giving with a unique approach that sets us apart from the ordinary."

(Reporting by Svea Herbst-Bayliss; Editing by Toni Reinhold)