U.S. Virgin Islands cooperating with Stanford probe

ST. JOHN'S, Antigua (Reuters) - The U.S. Virgin Islands has suspended a company owned by Allen Stanford from a tax incentive program and is cooperating with a U.S. fraud investigation of the Texas billionaire, a senior government official said on Friday.

The announcement by the government of the U.S. Caribbean territory followed moves by financial regulators in the United States, the Caribbean and Latin America to probe the business interests of Stanford, who is accused of "massive ongoing fraud" by the U.S. Securities and Exchange Commission (SEC).

FBI agents served 58-year-old Stanford on Thursday with court papers in Virginia related to charges that he was involved with an $8 billion securities fraud using high-yielding certificates of deposit.

"We are cooperating with the SEC," Percival Clouden, executive director of the Virgin Islands Economic Development Authority, told Reuters by telephone from St. Thomas.

"We are temporarily suspending his (Stanford's) access to our tax incentive program, until the U.S. investigation is resolved," he added.

Last year, Stanford Group broke ground on the construction of a global management complex in the U.S. Virgin Islands.

Stanford's U.S. Virgin Islands affiliate applied for tax breaks from the authorities there in 2006.

The territory's government approved his application in 2007, but Stanford had not yet received any tax breaks under the program because the government had not yet issued the certificate needed, Clouden said.

(Reporting by Jason Szep; writing by Pascal Fletcher, editing by Jim Loney)