Florida regulators seldom checked the Miami operations of Allen Stanford after giving the accused fraud master unprecedented freedom to send cash overseas and sell investment securities, the Miami Herald newspaper reported on Sunday.

Beginning in 1998, the newspaper said, Stanford had clearance from Florida bank regulators to move money from a Florida office to Antigua without filing reports to government agencies and to sell certificates of deposit to wealthy investors without fraud checks.

Over objections by the state's chief banking lawyer -- including concerns that Stanford was laundering money -- regulators granted sweeping powers never given to a private company, the newspaper said.

Now in jail, after last week being refused bail by a judge in Houston, Stanford, 59, faces criminal charges for a $7 billion Ponzi scheme involving high-yielding certificates of deposit at his bank in the Caribbean island of Antigua.

Stanford says he is innocent of the charges and that his multinational business was legitimate until the federal regulators gutted it by filing civil charges, which led to the confiscation of all his assets by a court-appointed receiver.

Stanford's Miami office was lushly appointed and one of the best producing in Stanford's company, which frequently focused on Latin American clients, according to the Miami Herald.

There was no lawful way that office should have been opened, the newspaper quoted Richard Donelan, the state's chief banking counsel, as saying.

Donelan told the newspaper that he argued during the late 1990s that the Stanford proposal broke Florida law and substantial questions existed about whether Stanford's bank complied with laws and money laundering in the Caribbean.

After winning the right, never before granted in the state, to run a foreign trust office, Stanford sold certificates of deposit without reporting the purchases, the newspaper said, citing state and court records.

In the first six years, the office -- known as Stanford Fiduciary Investor Services -- took in $600 million from customers, state records show, according to the newspaper.

The newspaper said that the Miami offices, unlike other Stanford companies elsewhere in the United States, bypassed rules requiring regular reports to officials of the amounts of money sent overseas.

In fact, employees shredded records of the trust agreements and (certificate of deposit) purchases once the original documents were sent to Antigua, state records show, the newspaper said.

State examiners visited the Stanford office three times over the past 10 years, the newspaper said.

An official of Florida's Office of Financial Regulation was not immediately available on Sunday to respond to the newspaper story, but the Herald said officials at agency had refused to comment other than to say they were reviewing the 1998 decision.

(Reporting by Michael Connor, Editing by Maureen Bavdek)