Antigua in shock as Stanford charged with fraud
Antiguans expressed shock on Tuesday at news their top investor, Texas billionaire Allen Stanford, was charged with "massive" fraud, and their prime minister said it could be "catastrophic" for the nation.cricket Updated: Feb 18, 2009 09:35 IST
Antiguans expressed shock on Tuesday at news their top investor, Texas billionaire Allen Stanford, was charged with "massive" fraud, and their prime minister said it could be "catastrophic" for the nation.
"The fall-out threatens catastrophic and immediate consequences ... There is no need for panic," Baldwin Spencer, the leader of the tiny twin-island state of Antigua and Barbuda said in a televised address.
On Tuesday, the US Securities and Exchange Commission accused Stanford, a brash, 58-year-old financier and sports entrepreneur, of operating an $8 billion fraud centered around the sale of certificates of deposit offered by Stanford International Bank Ltd (SIB), his Antiguan affiliate.
Many feared the US charges would revive Antigua's image as one of the Caribbean's most corrupt nations -- an image local policymakers took pains to shake off in the 1990s.
Spencer said his government was working on a contingency plan to tackle the Stanford crisis with the six-nation Eastern Caribbean Central Bank and Antigua's own central bank.
"I'm stunned. I've been hearing rumors about him all the time but I didn't want to believe them," said Genevieve Gore, a 55-year-old manager of N&J's Fashion and Variety Store on tourist-clogged Market Street in St. John's, the capital city.
The sleepy Caribbean nation of 365 beaches figures large in the US SEC charges.
But there were no visible signs of alarm at SIB headquarters, a grand 30,000 square foot (2,787 square meters) Georgian-style building atop a hill that is one of the first sights upon exiting the airport.
"He may still get away," said Duchel Westmorland, a 46-year-old landscaper. "A man is innocent until proven guilty. But this is bad. Stanford is the biggest investor in Antigua and he pays more than anybody else here. He's been a good man for this country. These charges will hurt us."
Holding dual US-Antiguan citizenship, Stanford lived for more than 20 years in the reef-girded island only 9 miles (14 km) wide and 12 miles (19 km) long with a population of just 70,000.
He owns the country's largest newspaper, heads a local commercial bank, is the biggest private employer, its top investor and is the first American to receive a knighthood from its government. He has homes sprinkled across the region -- from Antigua to St Croix in the US Virgin Islands to Miami.
"I'm shocked but everybody always wondered where he got his money from," said Odessa Haley, 28, as she worked the counter of a cafe in St. John's. "His businesses were spread across so many Caribbean countries. And even in hard times, he was making money."
'Don't trust the Americans'
Some Antiguans responded with skepticism to the news.
"I don't trust the Americans at all, we'll wait and see what our regulators say," said Winston Derrick, publisher of Antigua's Daily Observer newspaper. "Remember, the SEC doesn't regulate this bank," he said referring to Stanford's Antigua-based affiliate.
Leroy King, head of Antigua's Financial Services Regulatory Commission, told Reuters he was aware of the US charges but he declined to comment on what Antiguan regulators were doing.
At the St John's branch of Stanford's Bank of Antigua, an onshore commercial bank, a long queue formed as news of the charges spread. Security guards shut the doors at 3 pm sharp, when the island's banks typically close, as customers gathered outside talking about withdrawing money.
"I have my savings in there in fixed deposits and I want it. I need to get my money," said a women who would only identify herself as Harriet.
Some view Stanford as a financial benefactor who helped transform Antigua by financing construction of a hospital, building a shelter for single mothers and pouring money into airline services. His enthusiasm for cricket also doesn't hurt in a nation where the sport is a national pastime.
"A lot of people give him a good name, especially the workers. And a lot of people in Antigua depend on him, a lot of people work for him," said Francis Cortwright, a taxi driver.
But others regard the tall, mustachioed Texan as an arrogant land-grabbing investor in the mold of the island's former colonial rulers. "I'm shocked but not too surprised. I always thought he was too good to be true," said Sonia Barrow, 35, as she carried her infant.