FBI sweeps into cricket boss Sir Allen Stanford’s bank

[David Guyatt]

Despite requiring a minimum investment of $50,000, SIB has grown rapidly in recently years, attracting at least 30,000 depositors, mostly from Latin America.

Hhmmm. Cocaine money laundering perhaps?

**

http://www.timesonline.co.uk/tol/news/wo...734080.ece

From The Sunday Times
February 15, 2009
FBI sweeps into cricket boss Sir Allen Stanford’s bank



The returns offered by an offshore operation owned by the billionaire Allen Stanford have aroused suspicion

Sir Allen Stanford with three girls during a match
Robert Watts
AN offshore bank owned by Sir Allen Stanford, the billionaire whose $1m-a-player tournament rocked the cricket world, is understood to be under investigation by the FBI.

Agents are examining the Antigua-based Stanford International Bank (SIB), which has paid investors returns twice as large as conventional banks, after former employees said they witnessed “unethical and illegal practices”.

It is part of a wave of investigations by the Securities and Exchange Commission - the American equivalent of the Financial Services Authority - and other regulators amid fears that some investment schemes are vulnerable to collapse due to the global financial crisis.

Details of the inquiries have come to light as the England and Wales Cricket Board negotiates a new contract with the colourful Texan, whose antics at last year’s Twenty20 for $20m tournament incensed many of the game’s fans. The divorced father-of-six was forced to apologise after he was photographed with one of the England player’s wives sitting on his lap.

The bank confirmed that an investigation by the Securities and Exchange Commission was under way, but declined to comment on reports that the FBI and the Internal Revenue Service had also been examining the bank for “many months”.

The FBI refused to comment, but six investigators from the US Financial Industry Regulatory Authority entered the bank’s offices last month.

The investigations were sparked by two former employees, Mark Tidwell and Charles Rawl, who have filed documents in a Texan court that claim they were forced to leave after complaining about “unethical and illegal practices at the firm”. They allege that SIB gave clients falsified data on investment performance and that it destroyed documents during an earlier SEC investigation.

Despite requiring a minimum investment of $50,000, SIB has grown rapidly in recently years, attracting at least 30,000 depositors, mostly from Latin America. The bank has $8.6 billion under management. Investigators are trying to establish how SIB consistently funded returns that were often twice as large as those of other banks.

In an e-mail to staff, Stanford said his company was cooperating with the investigations, adding that “former disgruntled employees” had made complaints that could complicate an “otherwise routine” examination.

“I want to assure you that if they find any areas in which we need to improve or alter our operations, we will take immediate action to correct them,” he added.

Regulators are also examining concerns raised by Alex Dalmady, an analyst who claims that SIB used a little-known West Indian firm called CSA Hewlett to audit its accounts.

Dalmady also raised concerns about those managing the bank’s investments. “There is one board member, an 85-year-old cattle rancher and used-car dealership owner, who has the title of ‘invest-ments’,” he said in a report. The SEC is stepping up its oversight of investment companies after the $50 billion collapse of Bernie Madoff’s funds.

SIB said the bank had always acted within the law. “After the Wall Street excesses of the past decade, and the lax regulatory environment which made it possible, it is to be expected that regulatory agencies would look into every allegation regardless of how baseless it may be,” a spokesman said.

GOLD HELICOPTER

Flamboyance and controversy are Sir Allen Stanford’s hallmarks. He announced his inaugural Twenty20 cricket tournament by landing at Lord’s in a gold-plated helicopter. After concern from Buckingham Palace, he recently changed a page on his website that said he was knighted by the Earl of Wessex. The honour was in fact bestowed by Antigua’s government.