Texas billionaire Allen Stanford and three of his companies were charged with "massive" fraud last night as federal agents swooped on his US headquarters.
In a civil complaint filed in federal court in Dallas, the US Securities and Exchange Commission accused Stanford, a high-profile cricket promoter, and two executives of fraudulently selling $8 billion in high-yield certificates of deposit in a scheme that stretched from Texas to the Caribbean.
"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 named Stanford International Bank (SIB), based in Antigua with 30,000 clients in 131 countries and $8.5 billion in assets, and the group's Houston-based broker-dealer and investment adviser units.
In all, the company claims to oversee $50 billion in assets.
The news sent shockwaves across the twin-island Caribbean nation of Antigua and Barbuda, where the prime minister warned it could be "catastrophic".
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."
Early yesterday, about 15 federal agents, some wearing US marshals jackets, entered the lobby of company headquarters in the Houston Galleria area, a Reuters eyewitness said.
The company remained open for business but was "under the management of a receiver," a sign taped to the door read. Spokesman Brian Bertsch referred press inquiries to the SEC.
Mr Stanford, a 58-year-old Texan running the firm that his grandfather founded, has denied any wrongdoing, but his location remained a mystery. The SEC said he failed to respond to subpoenas seeking testimony and did not produce "a single document."
James Davis, a Stanford aide, and OY Goswick, a board member of the Antiguan affiliate, had also been subpoenaed but failed to appear, the SEC said.
Stanford's property holdings and celebrity associations drew comparisons with Wall Street financier Bernard Madoff, who was charged in December in a suspected $50 billion fraud.
Stanford was also expanding his political reach, opening a Washington lobbying office about two years ago after buying the Washington Research Group, a policy study unit of Charles Schwab & Co, in 2005.
Reuters