Authorities in Antigua have taken control of alleged fraudster Allen Stanford's offshore bank to prevent its collapse, according to reports.
Stanford International Bank (SIB) is at the centre of a multi-billion dollar fraud investigation by the FBI and Wall Street regulator the US Securities and Exchange Commission (SEC).
The SEC believes SIB duped investors who bought bonds and mislead them about the performance of their savings.
Authorities in Antigua have appointed British receivers to oversee SIB, alleged to have orchestrated an $8bn fraud, reports The Independent.
They have also taken control of a local bank in a bid to stop a run threatening to rock the jurisdiction's economy.
The investigation into the billionaire cricket promoter's business and allegations of 'massive fraud' by the FBI, has sparked panic on the island as he is Antigua's largest private-sector employer. Locals have been withdrawing their savings from cash machines.
Antigua's prime minister has already described the fallout to be 'catastrophic' for the island's economy and reputation as an offshore jurisdiction.
The Times reports American authorities have been suspicious of Stanford's financial dealings for nearly 15 years but have boosted their investigation following the Madoff pyramid scheme scandal.
Speaking on the BBC Radio 4's Today programme, Jeffrey Robinson, a journalist who linked Stanford to a Mexican drug cartel, says: "He has been on everyone's radar for a number of things."
He believes the Stanford case could have 'huge ramifications' for offshore banking. Some people in the offshore industry would be keen for Stanford to keep silent about his empire, he says.
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