Sir Allen Stanford Charged With Fraud
English cricket faces further embarrassment after Texan billionaire Sir Allen Stanford
was charged with fraud last night over his business activities.
The England and Wales Cricket Board were forced to cease negotiations with Stanford over a proposed quadrangular tournament in England this summer after action from the US Securities and Exchange Commission.
The SEC said that Stanford has been charged over a "massive fraud based on false promises" in the United States.
Stanford, three of his companies and two of his business associates have been charged by the SEC for allegedly "orchestrating a fraudulent, multi-billion dollar investment scheme centring on an US$8billion (certificate of deposit) programme".
Stanford agreed a deal with the ECB last summer for five one-off encounters, to be played annually each November, with an overall prize fund of US $20million per match.
The inaugural tournament took place at Stanford's private ground in Antigua last November but was surrounded by controversy.
A compromise had to be reached with the MCC to allow teams to use Stanford's trademark cricket bats but Stanford himself made unwanted headlines when he was filmed flirting with wives and girlfriends of the England players.
Before today's bombshell there were rumours that Stanford's banking business had run into problems and he was about to pull the plug on his $20 million matches.
The ECB tried to distance themselves from Stanford, though Giles Clarke, the ECB chairman, was forced to concede that their partnership with the billionaire now looked a mistake.
"We have a situation where a court case has been filed," Clarke said. "The matter is therefore sub judice. We also have contractual rights with this particular situation.
"At the moment, all of the obligations with regard to the game that was played have been met and all of the various people who were expected to do various things for that match have received their remuneration, as far as I am aware."
Of the four-team quadrangular tournament, also expected to feature Sri Lanka and New Zealand, Clarke added: "We will clearly consider that situation but, as we have suspended all negotiations, there is a strong possibility that will now not take place."
Though some ECB insiders are believed to be lining up chief executive David Collier as the sacrificial offering for the Board's association with Stanford, it is clear that Clarke has plenty of explaining to do.
It was Clarke who greeted Stanford when he flew into Lord's last summer in a gold plated helicopter and he was also happy to be photographed with Stanford in front of a Perspex box full of dollar notes.
It is unlikely that any contract with Stanford could have been agreed without Clarke's approval and Leicestershire chairman Neil Davidson is in no doubt where the blame lies.
"In any normal organisation the position of the chairman would be untenable in these circumstances," Davidson said.
"Giles Clarke was the architect of the Stanford deal not David Collier."
But Clarke insisted last night that the ECB had conducted due diligence procedures before they agreed terms with Stanford.
"He was conducting a banking operation, which, at the time, based on the information from the work that was done, showed no indication that there was anything that could prevent him from paying his obligations," said Clarke.
"We did what we did because we believed we were doing the right thing to raise funds for West Indies cricket and, indeed, our own game.
"It was an opportunity to get Chance to Shine established in the Caribbean.
"He had been doing business here with the West Indies Cricket Board for a number of years promoting tournaments, which had been successful."
Linda Chatman Thomsen, director of enforcement at the SEC, said: "Stanford and the close circle of family and friends with whom he runs his businesses perpetuated a massive fraud based on false promises and fabricated historical return data to prey on investors."
Regulators allege Stanford International Bank (SIB), through a network of advisers, sold US$8billion (5.62billion) worth of so-called "certificates of deposit" to investors promising "improbable and unsubstantiated" high returns.
Buyers of these CDs were told these deposits were safe, it is alleged. Stanford has been placed under a temporary restraining order and has had his assets frozen.
The Texas-born businessman currently holds dual citizenship with Antigua and Barbuda. He became the first American to be knighted by the Commonwealth nation in 2006.
The SEC also charged Stanford's former college room-mate, SIB chief financial officer James Davis, and Laura Pendergest-Holt, chief investment officer of Stanford Financial Group.
by: Sarfaraz Khan
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