Stanford whereabouts unknown

Feb 19, 2009 News

Depositors swarm banks

WASHINGTON (Reuters) – Federal regulators said yesterday they do not know the whereabouts of billionaire Texas banker Allen Stanford, charged with a “massive” $8 billion international financial fraud.

“We are unaware of his whereabouts,” Securities and Exchange Commission spokeswoman Kimberly Garber said from Texas.

Asked if Stanford may be outside the United States, she said: “Certainly that’s a possibility, but we don’t know.”

U.S. marshals assisting the SEC have been unable to serve Stanford with court orders freezing assets and appointing a receiver to run his Stanford Financial Group companies since a raid on his Houston headquarters Tuesday, Garber said.

Garber said she was unaware of any warrants for Stanford’s arrest and said the SEC was still hoping for his voluntary cooperation on the civil fraud charges.

“Certainly he is still subject to the court orders. To that extent, we certainly want to ensure that he is served,” Garber said. She said two executive who were charged with Stanford, Laura Pendergest-Holt and Jim Davis, had been served.

The FBI is in communication with the SEC regarding the Stanford case, FBI spokeswoman Shauna Dunlap said. She gave no more details. “The FBI is certainly aware of the SEC investigation, and we have been in contact with the SEC,” Dunlap said.

The SEC said in court papers disclosed Tuesday that Stanford had failed to appear in recent weeks for testimony ordered by subpoena.

CNBC reported that he had tried to hire a private jet to fly one-way to Antigua from Houston, but the jet lessor refused to take his credit card.

And in other developments, hundreds of people rushed yesterday to withdraw money from banks in Antigua and Venezuela linked to Texas billionaire Allen Stanford as the fallout from U.S. fraud charges against him rippled from the United States to the Caribbean, Latin America and Europe.

A day after the tycoon and two top executives were charged, investors and depositors in his banks and companies tried to redeem funds or sought information about their savings.

From the tiny Caribbean island of Antigua, a key outpost in the business empire of the flamboyant 58-year-old financier and sports entrepreneur, to Caracas, capital of oil producer Venezuela, regulators sought to calm public fears at a time of global economic recession and banking failures.

In a civil complaint, the SEC accused Stanford of fraudulently selling high-yield certificates of deposit from his Antiguan affiliate, Stanford International Bank Ltd (SIB).

The scheme has drawn comparisons with the alleged $50 billion fraud by Wall Street veteran Bernard Madoff.

Asked by reporters whether there would be more fraud cases of the scale and scope of Madoff and Stanford, U.S. Attorney General Eric Holder told reporters: “It’s hard to say. I’d like to think that those are going to be the largest.”

He declined to comment on why the Justice Department has not filed criminal charges against Stanford.

In the twin-island Caribbean state of Antigua and Barbuda, where Stanford is the biggest private employer, Prime Minister Baldwin Spencer said the SEC charges could have “catastrophic” consequences, but urged the public not to panic.

Police officers stood watch at the Bank of Antigua as at least 600 people stood in line outside.

“I’d like to get my money out,” said Andrea Lamar, 28.

Bank of Antigua, with three branches in Antigua and Barbuda, is part of Stanford’s global business interests, but separate from SIB, the offshore affiliate at the heart of fraud charges lodged by U.S. regulators.

A similar scene played out in Caracas, where hundreds besieged local offices of Stanford International, while regulators sought to calm clients of a sister company, Stanford Bank Venezuela, whose assets are not linked to the business targeted by the fraud charges.

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