ST. JOHN‘S, Antigua (Reuters) - Hundreds of clients seeking to withdraw funds rushed to branches of a bank in Antigua controlled by Texas billionaire Allen Stanford, a day after the tycoon was charged with an $8 billion fraud.
Two policemen stood watch at one Bank of Antigua branch as at least 600 people, including some foreigners, stood in line around a street corner, despite assurances from regional monetary authorities that the bank had sufficient reserves.
A similar-sized crowd formed at another branch near the airport of the tiny Caribbean island, where the flamboyant Texan financier and sports entrepreneur is the biggest investor. Many carried parasols to shield them from the tropical sun.
“I‘m worried and I’d like to get my money out,” said Andrea Lamar, 28, who joined the line with a friend on a street popular with tourists in the nation’s capital, St. John‘s.
A woman in the queue who declined to give her name said, “I wasn’t panicked until I saw this crowd. Now I‘m concerned.”
Bank of Antigua, with three branches in the twin-island state of Antigua and Barbuda, is part of Stanford’s sprawling global business interests but is separate from an Antigua-based offshore affiliate, Stanford International Bank Ltd (SIB), at the heart of fraud charges lodged by U.S. regulators.
Richard Dwyer, a 29-year-old American from Boston living in Antigua with his wife to study at a local medical school, said he was anxious to withdraw his money from Bank of Antigua.
“It’s better safe than sorry ... It’s all my student loan money. I owe interest on top of it so I hope I can pull it out,” he told Reuters.
On Tuesday, the U.S. Securities and Exchange Commission accused Stanford, a brash, 58-year-old tycoon, of operating an $8 billion fraud centered on the sale of certificates of deposit offered by Stanford International Bank.
In further fall-out from the SEC fraud charges, the local arm of the Stanford Group in Colombia halted its activities on the local stock exchange with the permission of authorities.
A British brokerage and investment house, Blue Oak Capital, distanced itself from Stanford’s group, saying it had cut earlier business ties.
“DO NOT PANIC”
In Antigua, the six-nation Eastern Caribbean Central Bank posted a statement at Bank of Antigua saying many depositors had started to withdraw funds, “causing some anxiety,” but that the bank had sufficient reserves.
“However, if individuals persist in rushing to the bank in a panic, they will precipitate the very situation that we are all trying to avoid,” the statement said.
As people bombarded local radio talk shows with calls expressing concern about their money, government officials tried to assure citizens that the bank was sound.
“Your savings are safe. Do not panic,” a Finance Ministry official said on local radio.
In contrast to the crowds at the Bank of Antigua, the scene at Stanford International Bank headquarters was more muted.
Several vans, SUVs and a minibus were parked there, while a handful of private security guards kept journalists away.
“I think this seems more than it is,” said one man carrying a briefcase, who spoke with a South American accent. He said he was a Stanford client, and identified himself only as Peter.
Stanford’s whereabouts were unknown.
Antigua’s prime minister, Baldwin Spencer, said in a televised address to the nation late Tuesday that the charges against Stanford could have “catastrophic” consequences for the nation, but he urged the public not to panic.
Holding dual U.S.-Antiguan citizenship, Stanford lived for more than 20 years on the reef-girded island, only 9 miles wide and 12 miles long and with a population of 70,000.
He owns the country’s largest newspaper, heads a local commercial bank, is the biggest private employer, and is the first American to receive a knighthood from its government.
Stanford has homes sprinkled across the region, from Antigua to St. Croix in the U.S. Virgin Islands to Miami.
Some in the line at Bank of Antigua expressed hope that Stanford would evade arrest and preserve his investments in Antigua.
“The charges come from America. They shouldn’t apply here. And he’s innocent until proven guilty,” said Sylvan Roberts, 43.
On Tuesday, about 15 federal agents, some wearing U.S. marshals jackets, entered the headquarters of Stanford’s company, the Stanford Group, in Houston, Texas.
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.”
Editing by Pascal Fletcher and Ted Kerr