The Caribbean prime minister had it all. But he wanted even more

Allegations of corruption on an idyllic island that drew celebrity incomers are relayed to official British inquiry

There is trouble in paradise, again. On the Caribbean group of islands of Turks and Caicos, Prime Minister "Iron" Mike Misick faces claims that he has amassed a personal fortune and financed a jet-setting life of luxury through corruption. He stands accused of benefiting from a series of dodgy land deals. And he faces an allegation of sexual assault.

His glamorous actress/model wife, Lisa Raye McCoy, has left him for an American basketball player, and the celebrities who queued up to buy into the fantasy island lifestyle – from Gwyneth Paltrow to Bruce Willis – are rattled by an official British inquiry which is threatening to expose the dark underbelly of island life.

Four years ago, Mr Misick appeared to have it all: a $300,000 salary and a place at the peak of the island's social pyramid. His lavish wedding on the island, a British overseas territory, saw Ms McCoy in a Swarovski crystal-encrusted gown. Theirs was a potent combination of political power and opulent glamour.

Four years later, things are not looking so good. They have split amid acrimony, partly because of a claim that Misick sexually assaulted one of her friends. The FBI is investigating.

Thirteen members of his party are calling for his resignation, and last week British lawyers began questioning him about his activities at an official commission of inquiry into corruption allegations. They were told that Mr Misick had received more than $21m of loans from international banks since taking power in 2003. The inquiry, a potential embarrassment to the Foreign Office, began after the Commons Foreign Affairs Select Committee reported serious concerns about "rampant" corruption on the islands. There is no evidence that any of the celebrity property investors was aware of this.

Headed by former Appeal Court judge Sir Robin Auld, the inquiry heard Mr Misick's prime ministerial credit card had been used to pay bills he incurred while on honeymoon in Israel. In his defence, aided by the London-based QC Ed Fitzgerald, Mr Misick claimed the loans were genuine and secured against his assets, and that he paid personal bills himself.

Bizarrely, Mr Misick claimed that some of his lifestyle was financed from political contributions, which he said were "often mixed with personal funds" in the Caribbean.