Antigua Senate approves seizure of Stanford land

ST. JOHN'S, Antigua (Reuters) - Antigua and Barbuda's Senate on Friday approved a government takeover of land owned by Texas billionaire Allen Stanford, accused of an $8 billion securities fraud.

The approval followed passage by the Caribbean nation's House of Representatives on Thursday of a government motion to take control of more than 250 acres of Stanford property before a U.S. court-appointed receiver seizes it.

The motion, which states the land is "required for a public purpose," now goes to the governor-general, Louise Lake-Tack, for formal passage into law.

Opposition senators abstained from voting. The opposition had argued that the government should wait to see more evidence of wrongdoing by Stanford and whether U.S. authorities will level criminal charges against him.

The U.S. Securities and Exchange Commission last week filed civil fraud charges against Stanford, a 58-year-old financier and sports tycoon. The case rocked Antigua and Barbuda, a twin-island state where he held businesses and properties and is the biggest private investor and employer.

Prime Minister Baldwin Spencer's government has made clear it wants to seize the Stanford land, which includes plots housing his Antigua-based banks and companies, as well as beachside homes and development properties, to mitigate the impact on the local economy of the fraud scandal.

"We have to give ourselves a bargaining chip, so when the receivers come they have to deal with the government of Antigua and Barbuda," Spencer told the House of Representatives after it approved the land takeover measure.

One of Antigua and Barbuda's top diplomats, McChesney Emanuel, called on Friday for the leaders of the country's Financial Services Regulatory Commission to resign for failing to spot problems in Stanford's banking business.

"I think it (the resignation) would send a message to the international community that we are very serious, (that) we're holding people accountable. We need to get serious because if we don't, they will not take us seriously in the international community," he told local radio.

CALL FOR MORE SCRUTINY

As agents of the U.S. court-appointed receiver fan out across the Caribbean to try to identify and recover Stanford assets, Antigua and Barbuda's government says it has the right to take Stanford property to guarantee the viability of a local bank, Bank of Antigua, which was owned by the Texas tycoon.

The government says it also needs the Stanford land to ensure prompt payment of a "massive outstanding debt to local suppliers" owed by the Stanford Group, and the continued employment of over 800 Stanford employees.

Emanuel, who is the country's consul-general in New York, said it was clear from the SEC filing that local regulators in Antigua and Barbuda did not monitor Stanford's operations closely enough.

"I think too often we have a lot of investors coming in and they sell a good story and that is good enough for us ... We must learn from this that we must do our research, we must be sure that these people have the ability to establish a business that would be operated under sound principles," he said.

Last week, Antiguan authorities appointed their own receiver to take over the Antigua-based Stanford International Bank (SIB), which the SEC alleges was at the heart of a "massive ongoing fraud" that duped thousands of investors.

Control of Stanford's Bank of Antigua, where depositors rushed to withdraw funds last week, was handed over to a grouping of regional banks in an operation coordinated with the Eastern Caribbean Central Bank.

Finance Minister Errol Cort told parliament on Thursday the U.S. court-appointed receiver had sent letters to every commercial bank in the eastern Caribbean advising them to freeze all Stanford-related accounts.

"The (U.S.) receiver has no legal jurisdiction over these funds," he said, adding that the receiver would have to petition Antigua and Barbuda's courts to gain jurisdiction.

"It becomes a big legal issue," Cort said.

From the United States to the Caribbean, Latin America and Europe, customers of the Stanford Group have been desperately trying to recover their savings and deposits. Many have been told their accounts have been frozen.

The SEC says Allen Stanford has surrendered his passport, but no criminal charges have been lodged against him so far, although he faces some class-action lawsuits by investors.

The FBI on Thursday arrested the Stanford Group's chief investment officer, Laura Pendergest-Holt, on obstruction charges, the first arrest in the case. A judge on Friday ordered her freed on a $300,000 bond.

(Writing by Pascal Fletcher, editing by Bernard Orr)