Reports: U.S. Regulators Probing Bank In Antigua

Multiple media outlets — including Bloomberg News, the Associated Press and Business Week — are reporting that the Securities and Exchange Commission, the Financial Industry Regulatory Authority and the Florida Office of Financial Regulation are investigating Stanford Financial Group.

At issue is the extraordinary rate of return advertised by Stanford International Bank Ltd. (SIB), an Antigua-based arm of Stanford Financial Group. Stanford Financial Group is an investment firm headquartered in Houston. It is run by billionaire R. Allen Stanford, whose fortune was estimated at $2.2 billion by Forbes magazine.

SIB’s certificates of deposit, for instance, have been advertised to return double or even triple the rates of U.S.-based CDs. The FBI now has joined the probe, the Wall Street Journal reports.

The question on the lips of reporters is whether Allen Stanford in the next Bernard Madoff. Fueling concern have been the reports of financial analyst Alex Dalmady. Take a minute to read Dalmady’s report if you’ve been following the AdSurfDaily case. Antigua is a Caribbean nation and favored spot for U.S. residents to move money offshore.

AdSurfDaily Inc., an alleged $100 million Ponzi purveyor, had more than $1 million on deposit in an Antigua bank, according to Aug. 25 court filings.

“[Andy Bowdoin] told the Secret Service that an Antigua account (in another name), holds over one million ASD dollars,” federal prosecutors said.

Perhaps ASD members would be wise to ask Bowdoin the name of the Antigua bank in which the funds are deposited.

But, getting back to SIB . . .

SIB has a strong presence in Florida. Dalmady, the financial analyst, has been asking some troubling questions and relating some troubling observations. One of the things that bothered him about SIB was the “unsophisticated” appearance of its website

It’s an observation mindful of reactions to the ASD website.

Reports now are circulating that SIB reserved the right to refuse early CD redemption requests, which has a whiff of some of the language ASD used to protect what federal prosecutors said was a Ponzi scheme. It’s not quite “rebates aren’t guaranteed,” but why restrict access to customers’ money, especially when you’re operating offshore? It only raises red flags.

Stanford Financial is blaming the probe on disgruntled employees; ASD blamed bad press it was getting on disgruntled MLMers.

It’s early. No charges have been filed against Stanford Financial Group.

About the Author

2 Responses to “Reports: U.S. Regulators Probing Bank In Antigua”

  1. Judging from all the reports of ponzi schemes being investigated recently you could be forgiven for thinking that these only happen in the US.

    Here’s a UK based scheme which has some similarities with the Madoff scheme:

    A City trader has been arrested by police investigating a £40 million investment fraud believed to be Britain’s first major credit-crunch case.

    Terry Freeman, 60, a foreign exchange trader, was arrested at his home in Buckhurst Hill, Essex, on Monday by detectives from the City of London Police Economic Crime Department.

    And the victims are not only from the US as well. A sad story:

    LONDON (Reuters) – A former British soldier killed himself after losing his life savings in an alleged $50 billion (34.8 billion pound) fraud run by Wall Street financier Bernard Madoff, news reports said on Friday.

    William Foxton, 65, who had served in the British Army and more recently worked as a defence contractor in Afghanistan, died from a single bullet wound to the head in Southampton on Tuesday, police said.

    Still think these ponzi schemes are just games? Just a bit of fun? That the government is “evil” for closing & prosecuting the scheme operators?

  2. Thanks, Tony. As you say, these Ponzis aren’t games at all. There are now at least two deaths linked to the Madoff case.