The move comes two days after US officials raided Stanford's main office in Houston, Texas and froze his assets and those of his firms - Stanford International Bank, based in Antigua, and US-based Stanford Group and Stanford Capital Management.

Banks seized

Venezuela has closed all Stanford Bank
branches and suspended transactions [AFP]
Also on Thursday, Venezuela seized a local bank owned by Stanford after panicked investors withdrew millions of dollars worth of deposits.

Ali Rodriguez, the Venezuelan finance minister, said on Thursday that Stanford Bank SA would be sold and the government would back all deposits, after at least $26.5m was withdrawn in two days.

It is estimated that Venezuelans invested at least $2.5 billion into the Antigua-based Stanford International Bank, about a third of the money US regulators hope to recover as they pursue their fraud case against Stanford, the Associated Press reported on Thursday.

The move comes despite the Venezuelan government trying to reassure depositors that the local bank was healthy.

Venezuela also closed all branches of Stanford Bank SA and said all further transactions would be suspended.

The authorities in five Latin American nations have also taken action against Stanford businesses, with Ecuador seizing two local branches of the group on Thursday, the Reuters news agency reported.

Stanford, 58, is one of the most prominent businessmen in the Caribbean, with a personal fortune estimated at $2.2bn by Forbes magazine.

The charges are the latest to be brought after an increase in scrutiny by investors, politicians and regulators on the returns promised and provided by investment firms, following the massive alleged $50bn fraud by Bernard Madoff, the Wall Street financier.