Venezuela seizes US 'fraud' bank

Run on bank owned by US billionaire accused of fraud prompts state action.

    Stanford has an estimated personal
    fortune of about $2bn [Reuters]

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

    Whereabouts 'unknown'

    The US Securities and Exchange Commission (SEC) raided Stanford's Houston offices on Tuesday and filed civil fraud charges against him and two of his executives, accusing him of fraudulently selling $8 billion in certificates of deposit with impossibly high interest rates to investors across the world.

    The SEC also froze Stanford's assets and those of three of his companies, Stanford International Bank, based in Antigua, and Stanford Group and Stanford Capital Management, both based in Houston.

    Depositors across Latin America and the Caribbean have since rushed to withdraw savings from Stanford-controlled banks.

    The current whereabouts of Stanford, a billionaire from Texas, remain unknown, authorities say.

    'Catastrophic' consequences

    Regulators allege Stanford forged historical data about investments which he then used to lure more investors for his products.

    On Wednesday in the twin-island state of Antigua and Barbuda where Stanford is the biggest private employer, Baldwin Spencer, the prime minister, said the SEC charges could have "catastrophic" consequences, but urged the public not to panic.

    But in Antigua's capital, St John's, the Venezuelan capital, Caracas, Mexico City and other cities hundreds lined up outside Stanford banks and offices to withdraw funds.

    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.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Survivor stories from Super Typhoon Haiyan

    Survivor stories from Super Typhoon Haiyan

    The Philippines’ Typhoon Haiyan was the strongest storm ever to make landfall. Five years on, we revisit this story.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    We Are Still Here: A Story from Native Alaska

    We Are Still Here: A Story from Native Alaska

    From Qatar to Alaska, a personal journey exploring what it means to belong when your culture is endangered.