Here, let me take that money of yours...

BBC News reports that FBI agents in Virginia have located and served Sir Allen Stanford with civil papers, a quick loan courtesy of the SEC. They would like to see him pay it back with other people’s money… and jail time.

Stanford has been accused of $8 billion fraud against investors. The claim is that they were lured by the promises of “improbably and unsubstantiated high returns on certificates of deposit and other investments.” The SEC calls the case “fraud of shocking magnitude” that loans itself quickly and easily to the recent memory of Bernie Madoff’s $50 billion Ponzi scheme.

Richard Kolko of the FBI revealed that agents had served the legal papers to Stanford in Fredericksburg, Virginia, at the request of the Securities and Exchange Commission. This step was necessary in order to ensure that Stanford would turn in his passport and be made aware of what he faced, said the BBC’s Richard Lister from Washington. Criminal charges have yet to be filed, so Stanford is not currently being held in custody.

Bank terror bonanza

As a result of Stanford’s fraudulent operations, branches of banks controlled by the Stanford Group have been shut down or placed under national control in Peru and Venezuela. The former nation suspended operations for 30 days, while Venezuela has announced it will take control. Panama, Ecuador and Antigua have also have taken action against Stanford’s interests there.

Regulators would have liked to allay investor fears about the banks Stanford is associated with, but runs on banks were perhaps inevitable in light of the news.

A US civil court judge has frozen Stanford’s assets and those of the Stanford Group, Stanford International Bank (SIB) and investment adviser Stanford Capital Management. Experts predict that criminal charges will be brought on Stanford soon. Until then, Bernie Madoff remains the sole charged financial shyster to light up the news boards from 2008. Eventually, when Stanford joins the club, perhaps both will go on quick loan to jail. Quick, because the resourceful never stay for long…

Related articles

• SEC files charges in another “massive” fraud (americablog.com)
• Stanford charges spark run on banks (guardian.co.uk)