Fraud investigators hunt elusive Stanford

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The Independent US

Investigators in the US have said they do not know the whereabouts of Sir Allen Stanford, the cricket entrepreneur charged with a multi-billion dollar fraud.

Sources at the Securities and Exchange Commission (SEC) confirmed yesterday that they were searching for the billionaire, who has not been seen in public since news of alleged fraud totalling 9.2 billion dollars (£6.5 billion) broke.

A spokesman for Stanford Financial Group repeatedly refused to discuss the tycoon's whereabouts when contacted.

Reports suggest that Stanford attempted to leave the US on a private jet bound for Antigua, but was thwarted after the firm refused to accept his credit card. A spokesman for the SEC said it was unaware of the reports.

Stanford has had his assets frozen and been placed under a temporary restraining order as part of the SEC complaint, which was filed in a Dallas court earlier this week.

The businessman was not needed in court for the complaint to be made. But US officials have been unable to serve the orders on him in person.

The Texas-born tycoon has been accused of fraud "of a shocking magnitude" the SEC said, relating to an eight billion-dollar (£5.6 billion) certificate of deposit (CD) scheme and a separate 1.2 billion-dollar (£840 billion) investment vehicle.

It follows an investigation into Stanford and his firms Stanford International Bank (SIB), Stanford Group Company and Stanford Capitol Management.

Regulators say Antiguan-based SIB, through a network of advisers, sold eight billion dollars (£5.6 billion) worth of supposedly "safe" certificates of deposit (CDs) to investors promising "improbable and unsubstantiated" high returns.

It is alleged that Stanford and his firms "misrepresented" to investors that their money was secure, falsely claiming the bank reinvested client funds primarily in "liquid" financial instruments and was monitored by a team of 20-plus analysts.

The SEC also claims that SIB falsely told investors it had no "direct or indirect" exposure to disgraced financier Bernard Madoff's massive pyramid scheme.

A complaint concerning a 1.2 billion-dollar mutual wrap programme, has also been filed.

The SEC says the investment vehicle was sold to investors using false historical performance records.

Alongside Stanford, regulators have also charged his former college roommate, SIB chief financial office James Davis, and Laura Pendergest-Holt, chief investment officer of Stanford Financial Group.

The news forced the England and Wales Cricket Board to suspend negotiations with the flamboyant businessman. Last year, the financier put on a million-dollar-a-man, winner-takes-all Twenty20 cricket contest between England and a team of West Indian all-stars.

Stanford has made the Caribbean his home, and currently holds dual citizenship with Antigua and Barbuda, becoming the first American to be knighted by the Commonwealth nation in 2006.

Yesterday, the fallout from the fraud charges hit his adopted home.

In Antigua, hundreds of people lined outside branches of Bank of Antigua, owned by Stanford. They fear that the controversy could bring down the bank despite the fact that it is not part of the SEC's action.

Regulators in the island urged calm amid concern that a panicked run on the bank could bring about its collapse.

"If individuals persist in rushing to the bank in a panic, they will precipitate the very situation that we are all trying to avoid," Governor Dwight Venner of the Eastern Caribbean Central Bank said.

The Antiguan government has said it is developing a contingency plan amid the growing crisis. Prime minister Baldwin Spencer said the charges against Stanford had "profoundly serious implications" for the island.

The charges have had a knock-on effect on other countries in the region. Regulators in Panama took over branches of banks owned by Stanford following a run on deposits. In Colombia, authorities suspended the activities of Stanford International Bank to protect "clients and investors" according to the Colombian Finance Superintendency.

A spokesman at Stanford Financial Group yesterday refused to discuss the fraud charges, referring every question to the SEC.

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