Friday, February 20, 2009

(HERALD) Venezuela seizes, sells fraud suspect’s bank

Venezuela seizes, sells fraud suspect’s bank

CARACAS. Venezuela yesterday announced the immediate seizure and sale of a local bank owned by Texas magnate and top cricket promoter Allen Stanford, who is accused of defrauding investors around the world.

Faced with a run on the bank by panicked Venezuelans, and amid swirling allegations of enormous international fraud, Caracas "has made a decision to intervene and to immediately sell the bank", said Finance Minister Ali Rodriguez.

The bank, which has 15 branches in the country, had already received offers from interested parties, he said.

Rodriguez stressed that the decision was not related to his own country’s financial situation, which he described as "stable".

"In no way is the situation of this bank due to domestic conditions," he said, instead faulting a lack of oversight by authorities in the United States.

The US Securities and Exchange Commission filed civil charges on Tuesday against Allen Stanford, 58, for what they called a fraud "of shocking magnitude" in selling US$9,2 billion in securities, "promising . . . improbable high interest rates".

The Venezuelan minister said the decision to take over the bank was made to calm anxious clients, who made massive withdrawals in the hours leading up to the decision.

"The government’s job is to avoid the capitalist crisis from affecting the Venezuelan economy," he said. Rodriguez reiterated that Venezuela on Wednesday made inquiries about the Stanford Bank situation to US authorities.

Stanford’s wealth management and financial services group has offices across North America, Latin America, Europe and the Caribbean.

It is the most high profile alleged fraud scheme since the SEC charged Wall Street financier Bernard Madoff with carrying out a US$50 billion Ponzi scheme in December.

Stanford’s companies include Antigua-based Stanford International Bank, Houston, Texas-based broker-dealer and investment adviser Stanford Group Company, and investment adviser Stanford Capital Management. — AFP.

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