Jet-setters find assets are frozen at Stanford International Bank

Panicky depositors were turned away from Stanford International Bank and some of its Latin American affiliates Wednesday, unable to withdraw their money after U.S. regulators accused Texas financier R. Allen Stanford of perpetrating an $8 billion fraud against his companies' investors.

Some customers arrived in Antigua by private jet and were driven up the lushly landscaped driveway of the bank's headquarters, only to be told that all assets have been frozen pending an investigation by Antiguan banking regulators.

"I don't know what to think. I have my life savings here," said Reinaldo Pinto Ramos, 48, a Venezuelan software-firm owner who flew in by chartered plane from Caracas Wednesday with five other investors to check on their accounts. "We're waiting to see some light."

Banking regulators and politicians are scrambling to contain the damage after the U.S. Securities and Exchange Commission (SEC) filed civil fraud charges against the billionaire on Tuesday.

Public records also show Stanford owes hundreds of millions of dollars in federal taxes.

The records show four federal tax liens against Stanford totaling more than $212 million. The liens are from 2007 and 2008.

Stanford, 58, has a personal fortune of $2.2 billion, according to Forbes magazine. He owns a home in St. Croix, in the U.S. Virgin Islands, and operates his businesses from Houston and Antigua, where his companies and charity have had such a prominent role that the islands' government knighted him in 2006.

Whereabouts unknown

SEC spokesman John Nester said the agency does not know where Stanford is.

Over the years, Stanford has cultivated his image by shuttling customers and politicians in corporate jets and spending money on cricket, polo and golf.

The head of Stanford Group, who grew up in Mexia, Texas, and graduated from Baylor University, began building a fortune by investing in Texas real estate after the 1980s savings-and-loan crisis, according to his company's Web site.

Stanford's Houston headquarters occupies a three-story building and nine floors of a tower across the street that also houses the Galleria Mall shopping complex, home to Louis Vuitton and Giorgio Armani boutiques.

The sales force used leather-bound marketing brochures and flights to Stanford's Antigua headquarters to convince investors to entrust their money to Stanford International Bank. He has six planes registered with the Federal Aviation Administration, according to the agency's Web site.

Secret investment tier

Michael Zarich, a senior investment officer with Stanford International Bank, told SEC officials in a sworn deposition dated Jan. 30 that Stanford was "misleading" in presenting its performance.

Zarich told SEC officials analysts weren't privy to 80 percent of the bank's investment portfolio. The portfolio was divided into three tiers with the first and second tiers dedicated to cash and a mixture of stocks, bonds and alternative investments. The third tier was a mystery, Zarich said. In 2007 that portion accounted for about $4 billion of the bank's $6 billion in assets at the time, Zarich said.

"As far as the other $4 billion, how did you know where that money was?" Thomas Keltner, an SEC attorney, asked during a follow-up deposition on Feb. 4.

"I did not," Zarich responded.

Political ties

Stanford has been a major political player in the U.S. as well, where some congressmen announced they would donate his campaign contributions to charity.

The U.S.-based Stanford Financial Group, through its political-action committee and employees, has contributed $2.4 million to political candidates, parties and committees in the U.S. since 1989, with nearly two-thirds going to Democrats, according to the Center for Responsive Politics, which tracks campaign spending.

Most of that cash flowed during the 2002 election, when Congress was debating a financial-services antifraud bill that would have linked the databases of state and federal banking, securities and insurance regulators.

The bill ultimately died in the Senate, where the biggest recipients have been Sen. Bill Nelson, D-Fla. ($45,900); Sen. John McCain, R-Ariz. ($28,150); Sen. Chris Dodd, D-Conn. ($27,500); and Sen. John Cornyn, R-Texas ($19,700). Rep. Pete Sessions, R-Texas, also received $41,375.

Stanford and his wife, Susan, also donated $931,100 of their own money, with 78 percent going to Democrats, including $4,600 to President Obama's presidential campaign last May 31. Records show $2,300 of that was returned the same day.

Stanford also donated to Former House Majority Leader Tom DeLay, whose political committees paid for flights on Stanford's jets 16 times from 2003 through 2006, according to DeLay's financial disclosures.

Stanford also donated $2,300 to House Ways & Means Committee Chairman Charles Rangel in 2008, and a total of $10,800 over five years, according to the tracking center.

A spokesman said Rangel would "donate $10,800 from his political committee to charity."