|Sir Allen Stanford denies any wrongdoing at his Antiguan bank|
Evidence has emerged that the Texan who bankrolled English cricket may have been a US government informer.
Sir Allen Stanford, who is accused of bank fraud, is the subject of an investigation by the BBC’s Panorama.
Sources told Panorama that if he was a paid anti-drug agency informer, that could explain why a 2006 probe into his financial dealings was quietly dropped.
Sir Allen vigorously denies allegations of financial wrongdoing, despite a massive shortfall in his bank’s assets.
– Kucinich: Who Told SEC to “Stand Down” on Stanford Probe?
– US authorities had been investigating Allen Stanford for 15 years! (Times)
– FBI tracks down Texas financier in $8 billion fraud case (AP):
Stanford is not under arrest and is not in custody.
– Past probes sought to tie Stanford to drugs (Houston Chronicle)
– Former Assistant Secretary of Housing: The U.S. is the Global Leader in Illegal Money Laundering
But the British receiver of his failed Stanford International Bank – based in Antigua – told Panorama that the books clearly show the deficit.
Of the $7.2bn (£4.8bn) in deposits claimed by the bank, only $500m (£331m) has been traced.
| The UK government does take financial malpractice very seriously and issues regular advice on countries and jurisdictions where there may be serious deficiencies in regulation
Foreign Office spokesman
The $6.7bn (£4.4bn) black hole in Sir Allen’s off-shore bank affects 28,000 depositors – 200 of whom are British, who have collectively lost $80m (£53m) – and raises serious questions for the British Foreign Office and the American authorities.
Secret documents seen by Panorama show both governments knew in 1990 that the Texan was a former bankrupt and his first bank was suspected of involvement with Latin American money-launderers.
In 1999, both the British and the Americans were aware of the facts surrounding a cheque for $3.1m (£2.05m) that Sir Allen paid to the Drug Enforcement Administration (DEA).
It was drug money originally paid in to Stanford International Bank by agents acting for a feared Mexican drug lord known as the ‘Lord of the Heavens’.
The cheque was proof that Stanford International Bank had been used to launder Mexican drug money – whether or not Sir Allen knew it at the time.
On 17 February of this year, the US Securities and Exchange Commission (SEC) accused Sir Allen of running a multi-billion dollar Ponzi fraud – when cash from new depositors is used to pay dividends to old depositors – civil charges he has denied.
Two and a half months after the SEC filing, the Texan has not yet faced criminal charges.
He was initially investigated by the SEC for running a possible Ponzi fraud in the summer of 2006, but by the winter of that year the inquiry was stopped.
|The assets of Stanford International Bank have been frozen|
Panorama understands that the decision was taken because of a request by another government agency.
Panorama is aware of strong evidence that Sir Allen was a confidential agent of the DEA as far back as 1999 – the year he made out the $3.1m cheque to the DEA.
Sources close to the DEA believe he worked with the agency, turning over details of money-laundering from Latin American clients from Colombia, Mexico and Venezuela and Ecuador, effectively guaranteeing himself a decade’s worth of “protection” from the authorities, especially the SEC.
“We were convinced that Stanford’s bank attracted millions of narco-dollars, but it was very difficult to get the evidence to nail him,” sources told Panorama. “The word is that Stanford has been a confidential informer for the DEA since ’99.”
Financial experts believe that many of the depositors in Sir Allen’s off-shore bank were ordinary investors attracted by high interest rates, but that its base in the Caribbean also attracted drug money.
The DEA declined to comment on the allegation that he had been one of their informers, and the English Cricket Board said they had investigated Sir Allen fully and that he had fulfilled his contract.
A Foreign Office spokesman said: “The UK government does take financial malpractice very seriously and issues regular advice on countries and jurisdictions where there may be serious deficiencies in regulation. It is for companies and the financial professionals they employ to act on this advice with all due diligence.”
Sir Allen Stanford has bitterly denied that he is a fraudster, saying: “It’s no Ponzi.”
On the concerns about money-laundering, in one recent interview, he said: “The Mexican drug cartel? Absolutely not. Never would. That is something absolutely foreign to everything in my body.”
Panorama: The Six Billion Dollar Man, 11 May 2009, BBC One at 2030 BST.
By John Sweeney
BBC Panorama reporter
Source: BBC News