Antigua banks taken over

ST. JOHN'S, Antigua — Regulators in the Caribbean took over Antiguan banks owned by Texas financier R. Allen Stanford on Friday, hoping to contain damage to the local economy as U.S. investigators explore an alleged fraud scheme involving billions of dollars.

The Bank of Antigua suffered a run on deposits, even though it has not been named in the fraud complaint by the U.S. Securities and Exchange Commission.

The SEC complaint filed Tuesday focuses on the billionaire's offshore investment bank, Stanford International Bank Ltd., where an estimated $8 billion is now being controlled by a team of accountants working for Vantis Business Recovery Services.

U.S. authorities allege that Stanford lured clients by promising unrealistic returns on certificates of deposit and other investments. And offshore banking experts say he chose an ideal headquarters — an island where he could acquire power, prestige and even a knighthood to help win investors' confidence while keeping enforcement agencies at bay.

While these clients' life savings are now at risk, experts say red flags were clearly flying in Antigua, one of the world's least-regulated and least-transparent banking havens.

"In the offshore world, you have a hierarchy and Antigua is at the bottom," said David Marchant, an offshore banking analyst based in Miami. "Antigua was the wild west, and Stanford was the chief cowboy."