(Reporting by Ned Barnett in Chapel Hill, N.C.)

Author John Grisham, master of the legal thriller, says the real-life fraud scandals involving Bernard Madoff and Allen Stanford trump even the gripping fiction of his novels.

He says he is fascinated by the accusations of multibillion dollar Ponzi schemes, involving tangled webs of companies and offshore banks, which have put Wall Street financier Madoff in jail for 150 years and are also leveled against Texas billionaire and sports entrepreneur Stanford.

Madoff pleaded guilty in March to a $65 billion fraud and was jailed in June, while Stanford has pleaded not guilty to charges that he bilked investors in a $7 billion swindle.

“The thing about Bernie (Madoff) and Allen Stanford, you know, if I wrote that stuff nobody would believe it,” Grisham told reporters at the opening of the North Carolina Literary Festival at the University of North Carolina.

Lawyer-turned-author Grisham, 54, known for his works like “The Firm,” “The Testament” and “The Runaway Jury,” which probe such human failings as greed and deceit, said his imagination is no match for the stories behind real super swindlers.

“I just can’t get enough of this stuff … I love their stories — not for the human drama and the pain and suffering of it, that’s terrible — just for the sheer brazenness of these crooks,” he said.

“Stuff like a $65 billion Ponzi scheme by this guy who was very highly regarded and had loyal, loyal clients for many years and just devoured them. I can’t make it up fast enough and I can’t keep up with reality,” he said, referring to Madoff’s case.

The accusations against Stanford, whose business empire stretched from the Caribbean to the United States, Latin America and Europe, include an allegation that he performed a “blood oath” brotherhood ceremony in 2003 with a top financial regulator in Antigua and Barbuda to try to protect his banking business on the island from U.S. investigators.

Grisham says he “reads the newspapers” to find ideas for his thrillers but doesn’t completely depend on them for inspiration.

“I have too many other ideas to work on,” he said.

Trying to report the comprehensive story of Allen Stanford, the Texan billionaire that the U.S. Securities and Exchange Commission has accused of perpetrating an $8 billion fraud, is like trying to reassemble 100 documents after they’ve been through the shredder.

Stanford’s business and sports interests and the subsequent investigations into them stretch across the ocean, through numerous government agencies and courts and into the lives of people in places big and small.

As usual, there was too much to fit into any one story.

Last week I flew from New York to Houston and drove about three hours north to Mexia, Texas the small town where Stanford grew up. I wrote about Mexia here, and about Stanford’s complicated personal ties — apparently he charmed women as well as investors and has left an angry trail of both, including an estranged wife, several girlfriends and six children with four women.

Here are some thoughts and notes from Mexia. First tip: if you pronounce the town’s name correctly (Muh-HAY-uh) you win points with the townspeople.

Stanford and Goswick

Stanford’s board included Chairman Emeritus James Stanford,  Allen Stanford’s father, who is 81 years old, and gets around with a walker. His office is a little white rancher on the side of the main road heading into town from the interstate. There’s a tiny hole in one of the windows that James’s wife and Allen’s stepmother Billie said came from a BB or pellet gun. No, it’s due to disgruntled investors, she said. It was more likely poor neighborhood kids playing with guns again.

Later, Associated Press reporter Jamie Stengle and I got a joint interview with Richard Goswick, son of auto dealer O.Y. Goswick, who also sits on the Stanford board. Richard Goswick now owns Dick Scott Ford, where his Dad used to work, and we did the interview in his office, surrounded by what must have been a dozen trophies of exotic animal heads. That’s when we learned that the elder Goswick suffered a stroke in 2000 and that his condition had deteriorated so badly, he couldn’t communicate anymore.

The elder Goswick still got a subpoena to show up in Waco next Tuesday to be deposed by the SEC. James Stanford got one too. The younger Goswick told Stengle and me that these two gentlemen were smart people, yet older and simple — not buccaneers sailing the seas of high finance. If these octogenerians were only the board because James used to run the company and his son wanted to show his daddy and his daddy’s friend some respect, why did they say on the Stanford website that these two men were fundamental participants in the well being of the business?

Stengle wrote:

While they are not named in the civil complaint from the Securities and Exchange Commission, regulators said that Allen Stanford was helped in running the Antigua-based operation by his father and another Mexia resident described on the company’s Web site as being an “active investor and cattle rancher.”

But that man, O.Y. Goswick, 85, had a stroke in 2000 and has been unable to communicate, said his son, Richard, 63. And the Texas cattle ranch, whose description conjures up images of vast acreage with thousands of heads of cattle, was about 40 acres and a handful of livestock.

Even before the elder Goswick’s stroke, Richard Goswick said neither his father nor James Stanford had the financial knowledge to understand what would have been happening in the company. “These two gentlemen were so far out of place,” he said.

Employees and clients of Stanford Financial were told a different story. Besides the imagery of a gentleman cattle rancher, a 2008 letter to shareholders said the directors, “most of whom have been with the bank for most of its 22-year history, have been instrumental in our prior success and will continue to play a vital role in the bank’s future.”

Mexia, a great place to live no matter how you pronounce it!

The sign outside of Mexia puts its population a little below 11,000. That might have changed in the past decade, as most news reports said it has less than 7,000 residents — including the late Playboy bunny and notorious old-man-marrier Anna Nicole Smith. Either way, most people mispronounce it as MEX-ee-uh. The town doesn’t mind. On its website, it says Mexia is “a great place to live no matter how you pronounce it!”

Driving through town, there were plenty of cars on their way to somewhere else, but the town center was nearly deserted. A one-time oil boomtown, Mexia seems to have dried up. It’s home to some cattle ranchers, as O.Y. Goswick was described on Stanford’s website. His son clarified that “cattle rancher” in his father’s case means six head of cattle on about 40 acres of land. That’s O.Y. Goswick, not J.R. Ewing.

Reporters on location are in dire need of “man on the street quotes.” To illustrate how empty Mexia was on a weekday afternoon, the same cast of characters turned up repeatedly in media accounts with a Mexia dateline: printing company owner Dicky Flatt turned up in stories by Reuters, the AP and The Dallas Morning News. We all got a crack at Bob Wright, who runs The Mexia News (no website at the moment), and I noticed that the real estate agent I talked to (Jo Bennett, a broker at the firm that recently sold Stanford’s mother’s house after he bought her a place in Fort Worth) wound up being quoted in someone else’s story this weekend. It wouldn’t be surprising if half the people on foot in Mexia on Thursday were reporters, and the other half turned up in news reports.

Whatever Mexia and the neighborhood might be, they are not the kinds of places that Allen Stanford wanted to hang around in. Still, he did come back to see his parents every so often, particularly his mother.

When we heard that Stanford tried and failed to leave the country by private jet, some reporters thought that maybe he’d finally chosen to go back to his people instead of continuing to run.

We weren’t the only ones: While interviewing James Stanford, Billie came in to the office to tell us about a nice Baptist preacher she’d never met who came by to say his congregation was praying for them. I asked her to show me his card. It said, “Vaquero Investigations.” It turns out that the preacher is a private investigator too. Don’t mess with Texas.

For Mark Tidwell and Charles Rawl, former employees who filed a whistleblower lawsuit against Texas billionaire Allen Stanford’s financial empire, this week’s move by U.S. securities regulators to charge Stanford and two associates with “massive, ongoing fraud” brought a certain kind of redemption. But for the thousands of investors who now cannot tap into their accounts until a court-appointed receiver sorts out claims, it could be a long wait.

Tidwell and Rawl both worked in Stanford’s posh Houston headquarters until December 2007, when they say they were forced to leave. In an interview with Reuters in Houston on Feb. 19. 2009, the two talked about their growing concerns while working at Stanford, as well as the silver-spooned culture that prevailed. Click here to hear audio

Mark Tidwell, 40, a former senior vice president at Stanford, recalls a plush dining room with a new menu every day, and perks aplenty for employees fortunate enough to make the “Top Producers Club.”

“You know it’s different when you pull in because there is a security guard that greets every car that pulls into the parking garage,” Tidwell said.

Photo credit: Reuters/Chris Baltimore (Tidwell, left, and Rawl, right, pictured at a Houston law office on Feb. 19, 2009)

Allen Stanford’s financial empire is in chaos after the SEC charged that he and his partners were perpetrating a “massive” fraud, but only four months ago things appeared much sunnier, at least in a glowing Forbes profile that described his investment strategy as “sure and steady.”

The profile, “Crazy for Cricket,” was part of the Forbes 400 ranking of the richest Americans (Stanford was #205). It outlines his goal of competing within five years with the likes of UBS and Wachovia — although to be fair, the former company has had its own problems and Stanford managed to outlast the latter.

An exodus of wealth advisers is already under way, says Stanford, as writedowns and layoffs mount at those firms. In a single week in August, he says, his new Richmond, Va. office hired ex-UBS employees with clients representing $1 billion in assets. “There are a lot of deals to be made in financial services–banks, brokerages, trusts,” he says. Another industry he’s eyeing is desalination plants in developing countries like China: “We’re very bullish on making a lot of money on water in the next 20 years.”

The article also has some colorful details on Stanford Financial employee requirements — all were required to “wear a golden Stanford eagle pin at all times” — and Stanford’s religious beliefs:

Then there’s the rumor that Stanford carries around a vial of blood drawn from a Catholic priest with stigmata–Christ-like wounds. Not quite true. But one night in 1993 a friend called him up and asked if he could borrow a plane to fly an injured priest to New York for medical treatment. According to Stanford, the priest had scars on his hands and feet and oil gushing from his wounds. He remembers touching his head to the priest’s and experiencing a “life-changing” surge that strengthened his faith in God. The priest survived, but Stanford has lost touch with him.

Read more of Reuters coverage of Stanford here.