Financier and sports sponsor Sir Allen Stanford's offshore bank is believed to be under investigation by the FBI, according to reports.
Antigua-based Stanford International Bank (SIB) owned by the billionaire famous for his $20m Twenty20 cricket tournament, is being examined by agents after payments to investors aroused suspicion.
Investors were paid returns twice as large as conventional banks while former employees accused the bank of 'unethical and illegal practices," according to The Times.
While SIB clarified an investigation by American regulator, the Securities and Exchange Commission (SEC) is underway, it would not confirm reports the FBI and IRS has been examining the business 'for months'.
The FBI's probe was sparked by former employees Mark Tidwell and Charles Rawl's claims they were forced to leave the firm after complaining of 'unethical and illegal practices'.
SIB gave clients falsified data on investment performance as well as destroying documents during a previous SEC investigation, say the pair.
Internal emails from Stanford at the firm said 'former disgruntled employees' complaints could complicate an 'otherwise routine' investigation.
"I want to assure you that if they find any areas in which we need to improve or alter our operations, we will take immediate action to correct them," he adds.
The probe will also examine concerns raised by Alex Dalmady, an analyst who says the firm used CSA Hewlett, a relatively unknown West Indian firm, to audit its accounts. He also called attention to investment managers, claiming one board member is an 85-year old cattle rancher and used car dealership owner.
A spokesman for SIB says: "After the Wall Street excesses of the past decade, and the lax regulatory environment which made it possible, it is to be expected that regulatory agencies would look into every allegation regardless of how baseless it may be."
The SEC has raised its surveillance of investment companies after the $50bn collapse of Bernard Madoff's funds.
Stanford's bank has $8.6bn under management and has enjoyed recent growth attracting more than 30,000 depositors, mostly from Latin America with minimum investments of $50,000.
The chairman doggedly tries to be amusing
'Profitability is almost a myth'
Active Wealth in liquidation
Cautious welcome for volatility
Report output options