Stanford may face criminal fraud chargesFebruary 21st, 2009 - 3:44 pm ICT by ANI
Washington, Feb. 20 (ANI): Texan cricket tycoon Sir Allen Stanford is being investigated by the Federal Bureau of Investigation over a suspicion that he ran a form of ponzi scheme through his Stanford International Bank.
Stanford, who is currently being investigated for a 6.4 billion pound fraud, could face criminal fraud charges, US law enforcement sources said. Federal prosecutors are expected to probe whether his bank was involved in a Ponzi scheme, in which money from new investors who used to pay high returns to older investors, The Telegraph reports.
His six private planes worth 70 million pounds and 120feet-long yacht may also be seized.
A group of investors, who allege that SIB fraudulently peddled certificates of deposit which promised rates of return far above those available from other banks, have filed a class action suit against Stanford for the return of their money.
Now that the real estate and private equity markets are in freefall, many of those who purchased SIB’’s certificates of deposit have recently been informed that they cannot redeem them, an investor said.
They are seeking damages from SIB, which claims to have 30,000 clients in 131 countries.
Dennis Kucinich, the chairman of the Domestic Policy Subcommittee in the House of Representatives, criticized the SEC for taking such a long time for bringing Stanford under the scanner.
The fact of the matter is there were smoke signals about this particular individual and his manner of investments for a couple of years in a number of places, including the US, and nothing was done, Kucinich said.
Miami broker Charles Hazlett, a former employee of SIB said he tried to pass on his concerns to regulators six years ago. Hazlett was working with Stanford ‘’s banking empire when it was exploding in size. He raised questions about how the investment strategy worked, the company’’s lack of detailed balance sheets and its use of a small and little-known accounting firm.
I figured it was a matter of time before people figured things out, he said.
For two days after the SEC brought up the case, financial investigators remained unaware about Stanford ‘’s whereabouts. Later, the FBI traced him in Fredericksburg, Virginia, in a house of his girlfriend, Andrea Stoelkers relative.
The FBI agent handed him a 60-page complaint from the SEC, a federal court order freezing his assets and another order naming a receiver. Stanford vowed to fight the allegations, agreed to hand over his passport.
Stanford has hired the high-powered Washington attorney Brendan Sullivan to mount a defence against the alleged fraud. (ANI)
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