FBI traces Stanford as Obama offloads tycoon's donation

Published on Thursday 19 February 2009 23:35

THE missing cricket tycoon Sir Allen Stanford was last night found by the FBI and served with legal papers.

Stanford faces charges relating to frauds totalling $9.2 billion (6.5 billion), and last night US politicians rushed to offload campaign donations he had made in the last decade.

The FBI found the financier and sports entrepreneur and served him with civil legal papers at the request of US watchdog the Securities and Exchange Commission (SEC).

The billionaire was found sitting in a car in Virginia. An FBI spokesman said Stanford was "very co-operative" and added: "He wasn't hard to find. We said, 'Are you this guy?', he said, 'Yes', and we served the papers on him."

During the past decade, Stanford's firm, the Stanford Financial Group, spent $4.8 million (3.4 million) in lobbying.

Barack Obama, the US president, has now vowed to donate to charity $4,600 (3,223) he received from Stanford.

The Republican presidential contender John McCain also said he was returning the $28,150 (19,700) in donations received since 2000.

About 140 past and present members of Congress received Stanford-related donations during the past ten years, with 65 per cent of it going to Democrats.

Texas-born Stanford, 58, who last night was not under arrest or in custody, had not been seen since news of the alleged fraud broke.

On Tuesday, the SEC charged Stanford and three of his companies with committing an $8 billion (5.6 billion) fraud that lured investors with promises of impossibly high returns on "certificates of deposit" and other investments.

It followed an investigation into Stanford and his firms Stanford International Bank, Stanford Group Company and Stanford Capital Management.

Stanford has had his assets frozen and been placed under a temporary restraining order as part of the SEC complaint, which was filed in a Dallas court.

The tycoon has been accused of fraud "of a shocking magnitude", the SEC said.

The England and Wales Cricket Board (EWCB) has suspend negotiations with Stanford. Leicestershire chairman Neil Davidson called for Giles Clarke, EWCB chairman, to resign over links with the tycoon.

Stanford agreed a deal with the ECB last summer where he provided a prize fund of $20 million (14 million) per match in a cricket tournament.

Mr Davidson said: "It has been a tacky episode in English cricket and I think it's serious enough that he (Clarke] should resign."

Banking regulators across Latin America are investigating branches of Stanford's bank and investors have been scrambling to rescue their savings.

The Serious Fraud Office (SFO) said yesterday it was monitoring a possible link between the UK's branch of CAS Hewlett & Co and Stanford.

In the twin-island Commonwealth state of Antigua and Barbuda, where Stanford received his knighthood, Baldwin Spencer, the prime minister, said the charges could have "catastrophic" consequences.

Alongside Stanford, regulators have also charged his former college room-mate James Davis, Stanford International Bank's chief financial officer, and chief investment officer Laura Pendergest-Holt.

BACKGROUND

IN EARLY February it emerged that the Securities and Exchange Commission (SEC), the FBI, the Florida Office of Financial Regulation and the Financial Industry Regulatory Authority were investigating the Stanford Financial Group.

Federal agents raided the offices of Stanford Financial on 17 February and the SEC had a warrant issued for his arrest over "massive ongoing fraud" of up to $8 billion (5.6 billion).

Sir Allen Stanford's assets, along with those of his companies, were frozen and placed into receivership by a US federal judge.

On the same day that news of the fraud investigation became public, the English Cricket Board withdrew from sponsorship talks with Stanford.