- The Washington Times - Friday, February 20, 2009

The massive $8 billion fraud case against Texas financier Allen Stanford moved into the shadows of Washington on Thursday when FBI agents found the missing businessman and served him with civil court papers including an order to turn over his passport.

Mr. Stanford, who is accused of perpetrating one of the nation’s largest-ever financial frauds, was located in Fredericksburg, according to the FBI.

An anonymous law-enforcement official told The Washington Times that Mr. Stanford, 58, had not purposely tried to elude authorities. The official said FBI agents served him with several sets of civil court papers and orders about 1:45 p.m. while he was sitting in a car.

The source, who spoke on the condition of anonymity because he was not authorized to speak about the case, said Mr. Stanford was in Virginia because he had either family or friends there.

Mr. Stanford’s whereabouts had been unknown since Tuesday, leading to speculation that he had fled overseas.

“We’re so pleased and thankful to the Lord that he’s alive,” his stepmother, Billie Stanford, told Reuters news agency.

The orders and documents that the FBI served were the Securities and Exchange Commission’s complaint, the memorandum of law filed with the complaint, a court order freezing his assets and a court order appointing the U.S. Marshals as a receiver to handle the frozen assets.

A judge also ordered Mr. Stanford to surrender his passport, and arrangements were being made to do so Thursday night.

But he was not arrested and was not facing criminal charges.

The SEC had filed a civil complaint Tuesday against Mr. Stanford accusing him of scamming investors by promising impossibly high returns on certificates of deposit. The complaint also names Mr. Stanford’s companies, Antigua-based Stanford International Bank, Houston-based broker-dealer and investment adviser Stanford Group Co., and investment adviser Stanford Capital Management.

The assets of those companies also were frozen.

Earlier this week, federal agents raided Stanford Group Co. offices in Miami, Houston and other U.S. cities.

Several Latin American countries also have acted against Stanford businesses, and Britain reportedly is considering doing the same. The socialist government of Hugo Chavez has seized Stanford Bank Venezuela to prevent a run on the institution stem massive online withdrawals.

“The authorities were forced to take the decision to intervene, and there will be an immediate sale,” Finance Minister Ali Rodriguez told reporters in Caracas.

Ecuador took a similar measure against a Stanford-related brokerage house and a fiduciary firm. Officials in Mexico are investigating the local Stanford bank affiliate, and Peru suspended a local Stanford unit’s securities operations.

The SEC also has issued civil charges SIB Chief Financial Officer James Davis and Stanford Financial Group Chief Investment Officer Laura Pendergest-Holt in the enforcement action.

ABC News reported that Mr. Stanford has hired high-profile D.C. defense lawyer Brendan Sullivan, who has represented Oliver North and former Sen. Ted Stevens, Alaska Republican.

Mr. Sullivan did not return messages from The Times seeking confirmation and comment.

Mr. Stanford, who was knighted in the former British colony of Antigua where he holds dual citizenship, is a well-known bankroller of cricket and tennis tournaments. He has given hundreds of thousands of dollars to U.S. politicians from his personal fortune, estimated at $2.2 billion.

The U.S. has criticized Antiguan financial practices, accusing the small Caribbean nation of serving as a venue for money laundering and operations by Russian “shell” banks. Sanctions were imposed, but lifted in 2001.

Mr. Stanford is the second jet-setting financier to be accused of a multibillion-dollar fraud scheme in recent months. The civil case against him follows criminal charges being brought against Bernard Madoff, who is accused of orchestrating a $50 billion Ponzi scheme. Mr. Madoff remains under house arrest at his New York apartment.

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