20 Feb 2009

Rush to withdraw funds linked to fraud-accused banker

2:30 am on 20 February 2009

Hundreds of people have rushed to withdraw money from banks in Antigua and Venezuela linked to cricket-loving Texas billionaire Sir Allen Stanford, who is accused by authorities of massive fraud.

A day after the tycoon and two top executives were charged with an $US8 billion fraud by the US Securities and Exchange Commission, 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 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.

Two police officers stood watch at the Bank of Antigua as at least 600 people stood in a line stretching around a street corner, despite assurances from regional monetary authorities that the bank had sufficient reserves.

A similar scene played out in Caracas, where hundreds lined up to pull their money out of a Stanford bank.

US federal regulators said Wednesday they did not know Sir Allen's whereabouts. CNBC television reported that he tried to hire a private jet to fly from Houston, the site of his US headquarters, to Antigua, but the jet owner refused to accept his credit card.

Asked if the billionair may be outside the United States, Securities and Exchange Commission spokeswoman Kimberly Garber said: "Certainly that's a possibility, but we don't know."

In a civil complaint, the Securities and Exchange Commission has accused Stanford of fraudulently selling high-yield certificates of deposit from his Antiguan affiliate, Stanford International Bank Ltd.

Cricket boards take action

The England and West Indies cricket boards suspended sponsorship negotiations with Sir Allen following the fraud charges.

The billionaire came to prominence in the cricket world following his private Twenty20 competition in the Caribbean and, in particular, the $US20 million game in November between England and his own team made up of West Indian players.

Sir Allen, who has denied any wrongdoing, also has endorsement relationships with golfer Vijay Singh and England footballer Michael Owen, as well as involvement in golf and polo.

As a result of the charges, New Zealand Cricket chief executive Justin Vaughn says it appears unlikely a Twenty20 tournament backed by Mr Stanford and involving the Black Caps will go ahead.

New Zealand Cricket was in negotiation with the England and Wales Cricket Board about being involved in a multi-million-dollar tournament in London in May, ahead of the Twenty20 World Cup.