The FBI believes that Alan Teale, 61, former secretary of the Lloyds Insurance Brokers' Association, was embroiled in money- laundering and a maze of fake transactions. According to the agency there were 5,500 victims.
In 1991, Mr Teale, based in Atlanta, Georgia, was linked by Senate investigators with the organisers of a scheme involving a fictitious Cherokee Indian tribe whose bogus assets were used to prop up reinsurance companies.
He was arrested with his wife, Charlotte Rentz, 52, after a federal grand jury in Mobile, Alabama, named them in a 41-count indictment. The FBI say the scam involved receiving premiums but refusing to pay out on claims.
They are accused of operating through 24 insurance companies and an international network of servicing firms, agencies and brokerages. The indictment says the couple used foreign corporations and bank accounts to sidestep US licensing and accounting procedures.
Most of the alleged victims are from California, where consumers have been driven to offshore companies by high premiums and the often limited cover given by the main insurance companies.
One of Mr Teale's companies sold dollars 54m ( pounds 36m) of insurance in 1990 and 1991 before Californian regulators ordered brokers to stop selling its policies. But, the indictment alleges, when one of his companies was shut down he would start another one.
Mr Teale appears to have been under scrutiny from the authorities since shortly after he arrived in the US 11 years ago. In the mid- 1980s he ran the Victoria Insurance Co which collapsed leaving dollars 20m ( pounds 13m) in unpaid claims.
In 1991, he came to the attention of a US senate sub-committee. It heard that he was associated with the men behind a bogus tribe that used phoney assets to support companies underwriting policies for mainstream insurers.
The purported tribe claimed ownership of a 154-acre sand-bar in the Rio Grande river near the US-Mexican border, which it maintained was created by a divinely-inspired hurricane. Senate investigators found the 'Sovereign Cherokee Nation Tejas' was set up purely to allow its members to operate outside state and federal laws. Its treasurer was identified as another Briton, Dallas Bessant, who used the pseudonym 'Wise Otter'. The sub-committee's deputy chief counsel alleged that Mr Teale and his wife played 'a central role'.
The 'nation' issued dollars 50m ( pounds 33m) worth of treasury bills which were used to back reinsurance companies. This was despite the fact, according to investigators, that the alleged nation was virtually penniless - records showed it was denied credit to lease a car in 1989.
The tribe's other supposed assets included a plaster of Paris mask of Marlon Brando valued at dollars 1.5m ( pounds 1m), worthless bonds, and deeds to dollars 25m ( pounds 14.7m) worth of precious metals said to be under a car park in Colorado.
'The staff found that the group of individuals who call themselves the Cherokee Sovereign Nation Tejas is neither sovereign, nor Cherokee, nor a nation', the sub- committee's report concluded.
Earlier the 'tribe' was involved in a fracas with pistol-flourishing US marshals, whom they accused of violating their national sovereignty by invading their offices. However, their geography was as shaky as their finances: their supposed homeland was in territory ceded to Mexico years ago.Reuse content