20 Jun 2009

Billionaire to stand trial on fraud charges

5:23 pm on 20 June 2009

Texas-based billionaire Sir Allen Stanford has been indicted to stand trial, along with four others, on fraud and obstruction charges.

He surrendered to the FBI in Virginia after criminal charges were filed against him.

Justice Department officials said the charges related to a $US7 billion scheme to defraud investors.

Sir Allen already faces civil charges brought by the US Securities and Exchange Commission (SEC).

They allege that he fraudulently sold billions of dollars in certificates of deposit with improbably high interest rates from his Stanford International Bank Ltd, headquartered in Antigua.

Sir Allen, who holds dual US and Antigua & Barbuda citizenship, denies any wrongdoing and has said he would put up "the fight of my life" if indicted.

Massive Ponzi scheme alleged

In its civil case, the SEC accuses him, his college roommate and three of their companies of carrying out a "massive Ponzi scheme" over at least a decade and misappropriating at least $US1.6 billion of investors' money.

The first American to be knighted by the Commonwealth state of Antigua and Barbuda in 2006, Sir Allen made his first fortune in real estate in the early 1980s and expanded the family firm into a global wealth management company.

He has a high profile in the game of cricket: he bankrolled a major series in the West Indies earlier this year.

Antigua and Barbuda suspends regulator

Antigua & Barbuda has suspended the financial regulator who was indicted on charges of collaborating on the scheme run by Sir Allen, the Caribbean nation's attorney general said on Friday.

Leroy King was suspended from his post as head of the Antigua & Barbuda Financial Services Regulatory Commission, and the nation's Cabinet will meet on Tuesday to address further disciplinary action against him, Attorney General Justin Simon said in a statement.

He did not indicate whether the United States had asked Antigua & Barbuda to extradite King.