Texas financier R. Allen Stanford was tracked down on Thursday to Virginia, where FBI agents served him with legal papers in a multibillion-dollar fraud case.
FBI agents, acting at the request of the Securities and Exchange Commission (SEC), served Stanford court orders and other documents, the FBI and the SEC said.
Stanford is not under arrest and is not in custody.
In a civil complaint on Tuesday, the SEC accused Stanford, two other executives and three of his companies with committing an US$8 billion fraud that lured investors with promises of improbable and unsubstantiated high returns on certificates of deposit and other investments. It’s not clear how much of the US$8 billion was lost and how much investors might recover.
Until regulators received help on Thursday from the FBI, the SEC had not been able to find Stanford.
A law enforcement official, speaking on condition of anonymity, said the billionaire was served on Thursday afternoon by an agent who had staked out a location in Fredericksburg, Virginia.
The agent spotted Stanford around 1:45pm in a car driven by Stanford’s girlfriend. The agent spoke to Stanford, who was riding in the passenger side, the official said. The agent handed Stanford the SEC complaint, a federal court order freezing Stanford’s assets and another order naming a receiver.
Stanford told the agent he understood and would make arrangements to surrender his passport, the official said.
Stanford has not been charged with any crime, though federal agents continue to investigate the case.
The fallout from the fraud case is already rattling around the global financial system.
Venezuela on Thursday seized a failed bank controlled by Stanford after a run on deposits there, while clients were prevented from withdrawing their money from Stanford International Bank and its affiliates in a half-dozen other countries.
Stanford’s father, James, 81, told reporters in Mexia, Texas, on Thursday that he hoped the allegations aren’t true.
“I have no earthly knowledge of it,” said the elder Stanford, listed as chairman emeritus and a director for Stanford Financial Group. “I would be totally surprised if there would be truth to it. And disappointed, heartbroken.”
He said he would tell his son to “Do the right thing.”
Stanford, 58, owns a home in the US Virgin Islands and operates businesses from Houston, Texas, to Miami, Florida, and Switzerland to Antigua, where he holds citizenship and the government knighted him in 2006 in recognition of his economic influence and charity work.
A US federal judge appointed a receiver to identify and protect Stanford’s assets worldwide, including about US$8 billion managed by the Antigua-based Stanford International Bank, which has affiliates in Mexico, Panama, Colombia, Ecuador, Peru and Venezuela.
Also frozen were assets of Houston-based Stanford Capital Management and Stanford Group Co, which has 29 brokerage offices in the US.