U.S. charges Allen Stanford with "massive" fraud

By Anna Driver and Simon Evans

HOUSTON/ST JOHN'S, Antigua (Reuters) - Flamboyant Texas billionaire Allen Stanford and three of his companies were charged with "massive ongoing fraud" Tuesday as federal agents swooped down on his U.S. headquarters.

In a civil complaint filed in federal court in Dallas, the U.S. Securities and Exchange Commission accused Stanford, who sponsored international cricket matches, and two other top executives at Stanford Financial Group of fraudulently selling $8 billion in high-yield certificates of deposit in a scheme that stretched from Texas to Antigua and around the world.

"We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world," said Rose Romero, regional director of the SEC's office in Fort Worth, Texas.

The SEC complaint names Stanford International Bank, based in Antigua with 30,000 clients in 131 countries and $8.5 billion in assets, as well as broker-dealer and investment adviser units based in Houston, with 30 U.S. offices. In all the company claims to oversee $50 billion in assets.

Stanford's assets have been frozen and a federal judge has appointed a receiver "to take possession and control of defendants' assets for the protection of defendants' victims."

On Tuesday morning, about 15 federal agents, some wearing jackets identifying them as U.S. marshals, entered the lobby of Stanford's office in the Houston Galleria area, a Reuters eyewitness said.

Stanford Financial remained open for business but was "under the management of a receiver," according to a sign taped to the door of the firm's Houston office. Stanford spokesman Brian Bertsch referred press inquiries to the SEC.

Stanford, a 58-year-old Texan running the firm that his grandfather founded, has denied any wrongdoing. His location remained a mystery after the SEC said on Tuesday he had failed to respond to recent subpoenas seeking testimony and did not produce "a single document.

Stanford's real estate holdings and celebrity associations have drawn comparisons with Wall Street investment manager Bernard Madoff, charged in an alleged $50 billion fraud.

Stanford has endorsement relationships with golfer Vijay Singh and England soccer star Michael Owen as well as involvement in polo.

Last year Forbes Magazine estimated Stanford's personal fortune at $2.2 billion.

Stanford's website showed no apparent cause for distress on Tuesday, touting a motto of "hard work, clear vision, value for the client." The website highlighted its sponsorship of the 2009 Sony Ericsson Open in Key Biscayne, Florida in March.

According to the 25-page SEC complaint, Stanford International Bank (SIB) sold $8 billion in CDs "by promising high return rates that exceed those available through true certificates of deposits offered by traditional banks."

There were no signs of imminent criminal charges against Stanford, and a Justice Department spokesman would not confirm or deny the existence of a criminal investigation.

But Peter Henning, a professor at Wayne State University Law School in Michigan and a former federal prosecutor, said U.S. prosecutors have likely already filed a sealed criminal indictment against Stanford to be unveiled at a later time.