Caribbean regulators have taken over the Bank of Antigua, owned by the Stanford group, amid fraud accusations.

Fraud charges have been filed against the US businessman

The move comes after governments elsewhere, including in Peru, Venezuela, and Ecuador, suspended operations at banks owned by the group.

Sir Allen Stanford stands accused by US financial authorities of involvement in an $8bn (£5.6bn) investment fraud. He was served civil papers on Thursday.

The billionaire had been the single biggest private investor in Antigua.  The Securities and Exchange Commission (SEC) has accused Sir Allen of an alleged fraud “of shocking magnitude”. However, he is not in custody and has not been charged with any criminal violations.

Authorities in the US claim that Sir Allen attracted clients by promising unrealistic returns on investments. Customer accounts held by Stanford Financial Group were frozen until legal claims could be resolved, Reuters news agency reported the company’s receiver as saying on Friday.

“For the foreseeable future, customers cannot use their accounts to make payments because transfers out of these accounts are frozen until the receiver is able to verify there are no legal or equitable claims against those accounts,” said Ralph Janvey, a Dallas lawyer responsible for recovering Stanford assets.

Earlier in the day, the England and Wales Cricket Board (ECB) ended all contractual links with the billionaire.

The ECB had signed a multi-million dollar deal with the Texan to stage a series of Twenty20 cricket games and tournaments both in the Caribbean and in England.

The England team will not take part in any future Stanford Super Series matches, and the Stanford-sponsored Quadrangular Twenty20 games planned for England in 2009 will not now take place.

‘Unusual withdrawal’
The Eastern Caribbean Central Bank says it took control of the Bank of Antigua to prevent a run on the bank after the SEC filed civil fraud charges against Sir Allen in the US. The bank was not named in the SEC’s complaint.

The central bank said it had taken the step after “an unusual and substantial withdrawal of funds”. The move by Antigua regulators is aimed at maintaining stability and reassuring customers, correspondents say.

Antigua’s Financial Services Regulatory Commission has named a British firm, Vantis Business Recovery Services, as a receiver of Stanford International Bank and Stanford Trust Company, the Associated Press reports.

In 2006 Sir Allen was knighted by Antigua and holds Antiguan citizenship.

Investors gather at bankruptcy court to find out if they’ll ever get back Madoff money.

NEW YORK (CNNMoney.com) — Investors allegedly swindled in the largest Ponzi scheme in history reacted furiously when they learned Friday that Bernard Madoff didn’t put any of their money into securities for at least 13 years.

Several hundred of the 2,350 Madoff creditors gathered at the U.S. Bankruptcy Court in Manhattan to learn about the status of their claims and to revile the man accused of stealing their life savings.

Irving Picard, the court-appointed trustee for the liquidation of Madoff’s assets, told the crowd of angry investors that investigators, in their search of at least 7,000 boxes of financial documents, “found no evidence to suggest that securities were purchased for customer accounts.”

They also had some choice words for the Securities and Exchange Commission that failed to protect them.

“We’re not just the victims of Madoff; we’re the victims of the incompetence and irresponsibility of the SEC!” said Raymond Spungin, a 77-year old investor from Staten Island. His statement was answered with loud applause from the crowd.

Spungin said that he and his wife, Felice, had invested $700,000 in Bernard L. Madoff Investment Securities LLC, which informed them that their assets appreciated to about $1.8 million.

“I don’t expect to be getting any back,” said Spungin, who is living off his pension and social security.

But investors were told they would get back some of their funds, depending on how much they’d invested, and how much the government recovers. Picard said that some $650 million had been recovered so far, which was to be divided among investors, commensurate to how much they’d put in.

“Everyone shares the pain,” said David Sheehan, a lawyer on Picard’s staff, adding that the total recovery of funds was “very unlikely.”

Also, the investors could be eligible for $500,000 from the Securities Investor Protection Corp., a government entity that provides funds to victims of failed brokerage firms, said Picard.

Creditors will receive notices about the status of their claims within a couple of weeks, said Picard.

Picard said the investigators were continuing to evaluate artwork, like “prints” and “little statues,” and other assets from Madoff’s firm to add to the recovery fund. He said the relatively unsullied market-making portion of his business would be sold to raise money, as well.

Estimates of Madoff’s alleged theft range as high as $50 billion. David Sheehan, a lawyer on Picard’s staff, said investigators were still trying to find out where the bulk of the money went.

“We will be looking at a broad spectrum of what happened to the money that went in and went out,” said Sheehan.

Madoff, who is currently residing with his wife in their $7 million Manhattan apartment, used $10 million worth of assets to secure bail. The bail was placed against his home, as well as his wife’s residences in Montauk, N.Y., and Palm Beach, Fla. Sheehan said the law does not allow these assets to be seized for the recovery fund, because then Madoff would have to go to jail.

“Not that anyone in this room gives a damn about that,” he added, to the laughter of his audience.

Ron, a textile distributor who would not provide his last name, said he lost 30 years worth of pension savings to Madoff’s firm. He said he was more concerned with getting his money back than in punishing the most hated man in New York.

“It doesn’t help me whether he’s in jail or in his apartment,” he said.

Madoff, 70, was arrested in December and charged with one count of securities fraud. Instead of investing his clients’ money, he is accused of using the newest investments to pay off older clients, to create the appearance of returns, in a classic Ponzi scheme. His victims include celebrities like Kevin Bacon and John Malkovich, and charitable organizations, like the foundation established by Holocaust survivor and Nobel honoree Elie Wiesel.

If convicted, he could face a 20-year sentence and a $5 million fine. He has not been indicted.

An Australian toy designer has created a surprise hit with a doll of the US financier, Bernard Madoff, who is accused of a $50bn (£35bn) fraud.

The Smash-Me Bernie figurine wears a devil’s red suit, carries a pitchfork and comes with a golden hammer for smashing the doll into pieces.

Creator Graeme Warring said he came up with the idea after a friend of his lost money in the scandal.

Mr Madoff’s former clients may not feel like meeting the $100 price tag.

Smash-me Bernie attracted worldwide media interest when it went on display at the New York Toy Fair this week, says the doll’s creator.

‘Terrifically funny’

Mr Warring, who now lives in the US, told ABC news how he’d invented the figurine to try to console his out-of-pocket friend.

“He lost quite a bit of money and he was pretty grumpy about the whole thing,” Mr Warring was quoted as saying.

US financier Bernard Madoff is under house arrest pending trial

“So I made him this little action figure of Bernie Madoff… I put a hammer in the box and I said, ‘Listen, when you get this thing, just smash it to pieces – it’ll make you feel better, and then go bury it in the backyard and put it behind you’.

“So he did it, thought it was terrifically funny, and then he started telling some of his mates about it and before you know it, everyone’s started to order these things.”

Mr Madoff, 70, a former chairman of the Nasdaq stock exchange, is accused of running a Ponzi scheme – a system whereby early investors are paid off with the money of new clients.

If convicted, Mr Madoff faces up to 20 years in prison and millions of dollars in fines.

The financier is under house arrest while police investigations continue and has not yet entered a plea or responded to the charges.

U.S. Prosecutors Try to Determine Whether Banker Operated Ponzi Scheme

R. Allen Stanford’s father James, above, says he “can’t believe these allegations” against his son

Federal prosecutors are investigating whether Texas businessman R. Allen Stanford was operating a Ponzi scheme that defrauded investors around the globe, people familiar with the matter said.

These people said the Justice Department is investigating Mr. Stanford, who was hit with civil charges Tuesday by the Securities and Exchange Commission in connection with an alleged $8 billion investment fraud.

On Thursday, Federal Bureau of Investigation agents served Mr. Stanford with the SEC civil lawsuit in Fredericksburg, Va., the FBI and SEC said. SEC officials had said this week that Mr. Stanford’s whereabouts were unknown.Mr. Stanford has yet to respond to the civil charges. No criminal charges have been filed against him, and he wasn’t considered a fugitive.

One person familiar with the matter said Mr. Stanford was staying with a friend in the Fredericksburg area and was trying to locate a lawyer after his previous lawyer resigned from the case Feb. 14.  The SEC accused Mr. Stanford of luring investors into buying certificates of deposits with promises of high returns. Its complaint said his marketing material assured investors

that their money would be put into liquid assets, but that instead he poured the money into hard-to-trade assets, including real estate and private equity. The SEC complaint didn’t use the words Ponzi scheme, which refers to a scheme in which money from new investors is used to pay off older investors.

R. Allen Stanford

Now, authorities believe the operation may have been largely a Ponzi scheme, people familiar with the matter said. The SEC’s investigation is continuing.

Since October 2006 the SEC had been investigating Mr. Stanford and his businesses, which include a brokerage firm, an investment-advisory business and Antigua-based Stanford International Bank. Federal prosecutors opened their inquiry more recently.

The investigation picked up steam in December after the Bernard Madoff case broke. Mr. Madoff told his sons he was carrying out a Ponzi scheme, according to an SEC complaint. At the same time, the Stanford bank liquidated $250 million in assets over a few weeks.

Tuesday, a federal judge in Dallas froze Mr. Stanford’s assets and at three entities under the brand Stanford Financial Group and appointed a receiver. Financial regulators across South America have since stepped in to try to prevent runs on financial institutions owned by Mr. Stanford.