Fraud probes into Texas billionaire Allen Stanford's far-flung financial empire extended through two continents on Thursday as Venezuela and Ecuador seized a bank and two companies hit by the widening scandal.
Five Latin American countries have now taken action against Stanford businesses, while Britain's Serious Fraud Office (SFO) is monitoring a possible UK link after media reports that Stanford's books were audited in Britain.
The whereabouts of the jet-setting 58-year-old tycoon, who has a Caribbean knighthood and luxury U.S. and Caribbean homes, is not known. The U.S. Securities and Exchange Commission has accused him and two colleagues of massive fraud.
U.S. federal agents raided Stanford Group offices in Miami, Houston and other U.S. cities earlier this week.
The fallout from the SEC charges against the flamboyant, mustachioed financier has rippled far beyond U.S. borders, prompting investigations from Houston to Antigua and Caracas.
The SEC accused Stanford in a civil complaint on Tuesday of fraudulently selling $8 billion in certificates of deposit with impossibly high interest rates from his Antiguan affiliate, Stanford International Bank Ltd (SIB).
The scandal, emerging hard on the heels of the alleged $50 billion fraud by Wall Street veteran Bernard Madoff, has again spooked international investors and sharply increased public distrust of investment schemes.
In Caracas, the government of socialist President Hugo Chavez took control of Stanford Bank Venezuela, one of the country's smallest commercial banks, to stem massive online withdrawals following the SEC fraud charges.
The authorities were forced to take the decision to intervene and there will be an immediate sale (of the bank), Finance Minister Ali Rodriguez told reporters.
Another Andean nation, Ecuador, announced it was seizing two local Stanford units -- a brokerage house and a fiduciary firm. We will intervene to protect the interests of investors, Santiago Noboa, the state regulator of the stock exchange in Quito, told Reuters.
Mexico's banking regulator said it was investigating the local Stanford bank affiliate for possible violation of banking laws.
Peru's securities regulator suspended the operations of a local Stanford unit.
ABC News reported on Wednesday that federal authorities had been probing whether Stanford was involved in laundering Mexican drug money, but the U.S. Drug Enforcement Administration (DEA) said it had no current inquiry underway.
An initial review also revealed no past investigations, but officials were still checking, a DEA spokesman said.
Another federal law enforcement official said federal agencies previously had investigated suspected money laundering at Stanford's offshore banks but did not find evidence warranting criminal charges.
As investigations into Stanford's businesses widened, evidence emerged that his Stanford Group Co had been disciplined previously by the U.S. broker-dealer watchdog, the Financial Industry Regulatory Authority (FINRA).
In November 2007, FINRA fined Stanford Group $10,000 for misleading sales literature that failed to prominently disclose main risks, such as that the CDs were not issued by a U.S. bank and were not insured by the Federal Deposit Insurance Corp.
The group was also fined $20,000 in April 2007 for, among other things, not promptly forwarding customer checks from the firm's retail brokerage operations and conducting a securities business without maintaining minimum capital levels.
In March 2008 the firm was fined $30,000 for research reports that violated a number of broker-dealer rules.
Appearing on CBS' Early Show, Mark Tidwell, former senior Stanford vice president, said he detected warning signs three years ago. There was a pattern developing of published returns not matching what clients were receiving, he said.
Tidwell said that when he confronted company officers about SEC inquiries, They told us everything was fine. They said that this was part of a routine inquiry, that we shouldn't be worried about it, that we should reassure our customers that everything was OK.
Tidwell and another Stanford investor left the company about a year ago, CBS said.
ANTIGUA UNDER SCRUTINY
Clients besieged branches of the Stanford-owned Bank of Antigua on Wednesday in the tiny Caribbean island that was a key outpost of Stanford's empire. The lines were smaller on Thursday, witnesses said.
Antigua and Barbuda Finance and Economy Minister Errol Cort said late on Wednesday the twin-island Caribbean state was scrambling to shore up its banking system against the potentially devastating impact of the U.S. fraud charges against its biggest private investor and employer.
In St. John's, a small Antiguan firm that Stanford identified as the auditors of his offshore bank said on Thursday they had no information about ties to the tycoon.
The head of C.A.S. Hewlett & Co in the Antiguan capital said the firm's former chief executive, Charlesworth Hewlett, was the only person with possible knowledge of a relationship to Stanford. Hewlett died on January 1 at the age of 73.
We are not privy to any information about any relationship with Stanford, the firm's head, who would identify herself only as Celia, told Reuters by telephone.
Britain's Evening Standard newspaper had reported that Hewlett's daughter Celia had taken on the responsibilities of the accounting firm from London after her father died.
Stanford's personal fortune was estimated at $2.2 billion last year by Forbes Magazine. He holds dual U.S.-Antiguan citizenship, has donated millions of dollars to U.S. politicians, and has secured endorsements from sports stars, including golfer Vijay Singh and soccer player Michael Owen.
The England and Wales Cricket Board (ECB) has already severed its association with Stanford.
The ATP governing body of men's professional tennis circuits said on Thursday it had terminated Stanford's role as its Official Investment Advisor for the ATP World Tour.
In Antigua, Stanford owns the largest newspaper and is the first American to receive a knighthood from its government.
Antigua has faced U.S. scrutiny in the past for alleged money laundering activities and operations by suspected Russian shell banks.
Jonathan Winer, a Washington lawyer and former State Department official in the Clinton administration, said that following a U.S. warning to Antigua in the late 1990s, consultants and lawyers working for Stanford took control of records of Antigua's bank regulatory agency to carry out a cleanup of the suspect banks.
The local bank regulator objected, as did the U.S. government, Winer said. The conflict of interest that we felt existed with using Mr. Stanford and his people to clean up the banking system was unique ... it was bizarre and inappropriate.
One of the results of all this was that Antigua was put on a watch list.
In response, Antigua implemented banking reforms requested by the United States and the sanctions were lifted in 2001.
(Additional reporting by Deisy Buitrago and Jorge Silva in Caracas, Catherine Bosley and Luke Baker in London, Maria Luisa Palomino and Terry Wade in Lima, James Vicini, Randall Mikkelsen and Rachelle Younglai in Washington, Jonathan Bramley in London; writing by Pascal Fletcher)