Allen Stanford's own lawyer 'blew whistle on $9.2bn fraud - VIdeo below
One of Allen Stanford's own lawyers has emerged as the key figure who prompted regulators to take action over an alleged $9.2 billion fraud against the flamboyant Texan billionaire who sponsored a $1 million-a-man cricket match.
The US Securities and Exchange Commission lodged a civil suit against Mr Stanford and his Stanford Financial Group last night, claiming that it was investigating "a fraud of shocking magnitude that has spread its tentacles round the world".
The news is a stunning blow for the England and Wales Cricket Board and its chairman, Giles Clarke, who signed a controversial, five-year sponsorship deal worth $100 million (about £70.2 million) with Mr Stanford in a glitzy ceremony at Lord's last summer.
The SEC's inquiry into the improbably high rates of return on Mr Stanford's investment products had been running since last July, but according to the Bloomberg news agency the turning point came last week, when a lawyer for Stanford International Bank (SIB) in Antigua informed the SEC that he wanted to withdraw all the evidence he had given so far.
"The attorney's withdrawal is a massive red flag that screams fraud," said Peter Henning, who teaches criminal and securities law at Wayne State University in Detroit.
"If the SEC hadn't turned up the heat by that point, it did then."
Bloomberg said that a source familiar with the case named the lawyer as Thomas Sjoblom , of Proskauer Rose LLP. Mr Sjoblom is an expert in financial fraud who worked for the SEC for 20 years before joining Proskauer Rose in 1999.
He has refused to comment, and last night Brian Bertsch, Mr Stanford's spokesman, was referring all questions about the case to the SEC. Mr Stanford has denied any wrongdoing.
Analysts have raised concerns that SIB was audited, not by PricewaterhouseCoopers or KPMG, which both have large branches in Antigua, but by a small local firm called CAS Hewlett, whose chief executive, Charlesworth Shelly Hewlett, died last month.
Senior Advisor (Tax and Legal), National Technical Training and Development, Office of the Chief Tax
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