Hunt for Allen Stanford and his billions

[Nostalgia]

The US authorities were scrambling yesterday to find $50 billion of assets connected to Allen Stanford, the Texan cricket impresario, as the fallout of his alleged fraud rippled across the world.

Mr Stanford boasted of having customers in 140 countries. Panicked investors in the Caribbean and Latin America rushed to withdraw their savings from banks linked to his financial empire. Many left empty-handed.

The Securities and Exchange Commission (SEC), the Wall Street regulator, has sought the help of the Financial Services Authority to help to track down money in the UK.

The flamboyant billionaire was nowhere to be seen. The SEC said that it had no idea where he was. Locals in Antigua said that he owned a yacht and an aircraft, though he would be expected to contact the immigration authorities before leaving the island.

Mr Stanford, who was charged by the SEC on Tuesday with defrauding investors of $9.2 billion , is understood to be under investigation by the FBI.

The scale of his influence became clear. He donated funds to President Obama’s election campaign and sponsored the annual charity polo day at Sandhurst, hosted by the Prince of Wales. Michael Owen, the Newcastle United and England striker, is a global ambassador for the Stanford Financial Group. Tennis, golf and basketball tournaments and teams who have benefited from his millions, not to mention cricket in England and the Caribbean.

The scam is the second major fraud to hit America in three months after Bernard Madoff confessed that his $50 billion investment firm was “just one big lie”. It is a devastating blow to the Obama Administration, which is trying to persuade investors to trust their savings to American institutions.

The FBI is convinced that the two huge frauds are just the tip of the iceberg. John Pistole, the deputy director general of the FBI, told politicians on Capitol Hill last week that the agency was investigating 530 corporate fraud cases, including 38 which are directly related to the current economic crisis.

The SEC has brought 27 cases against financiers running investment scams similar to Mr Madoff’s. It believes that Mr Stanford duped his investors, who bought bonds from Stanford International Bank in Antigua, into thinking that their money was invested in the shares of major, reputable companies and that he lied about the performance of their savings. The regulator also accuses Mr Stanford of lying to investors about their exposure to Mr Madoff. He lost about $400,000 to the financier’s Ponzi scheme. A Dallas judge has frozen the business activities of Mr Stanford and his personal fortune. Investigators are now trying to track down the $50 billion worth of assets that he boasted his empire owned. On Tuesday, SEC officials raided his offices in Houston, Memphis and Tupelo.

Mr Stanford became known across the world after sponsoring the twenty20 cricket match in the West Indies last year, with a prize pot of $1 million per player.

http://www.timesonline.co.uk/tol/new...cle5762670.ece