US tycoon charged over $8bn fraud

Texan billionaire and cricket promoter Sir Allen Stanford has been charged over a $8bn (£5.6bn) investment fraud, US financial regulators say.

The Securities and Exchange Commission said the financier had orchestrated "a fraudulent, multi-billion dollar investment scheme".

The SEC said the fraud was "based on false promises and fabricated historical return data".

English cricket bosses have pulled out of sponsorship talks with Sir Allen.

The charges against Sir Allen, three of his companies and two executives of those companies followed a raid by US marshals on the Houston, Texas, offices of Stanford Financial Group.

A US judge has frozen the assets of Sir Allen and the other defendants as well as those of the Stanford Group, its Antigua-based subsidiary Stanford International Bank (SIB) and another subsidiary, investment advisor Stanford Capital Management.

A receiver has been appointed to "preserve assets for investors", the SEC said.

'Close circle'

Sir Allen last year promoted the Stanford cricket series which saw a West Indian all-star team - the Stanford Superstars - beat an England team for a $20m prize.

The England and Wales Cricket Board (ECB) suspended sponsorship negotiations with him following the fraud charges.

The ECB has a five-year deal to play games against the Stanford Superstars.

The SEC said that the Stanford International Bank - the largest in the Caribbean - sold approximately $8bn worth of certificates of deposit to investors, promising "improbable and unsubstantiated high interest rates".

The bank was "operated by a close circle of Stanford's family and friends", the SEC said in a statement.

"We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world," said Rose Romero of the SEC.

The SEC began investigating Stanford Group last year and intensified their probe following the arrest of US financier Bernard Madoff in December over an alleged $50bn (£35bn) investment fraud.

In the wake of that scandal, SIB falsely told its investors it had no exposure to the funds involved in the alleged Madoff fraud.

The Stanford Group lists its worth as more than $40bn. Antigua and Barbuda granted Sir Allen citizenship about 10 years ago and knighted him in 2006.

Forbes magazine lists him as the world's 605th richest man, with assets of $2.2bn.