But in February 2009, it was announced that Stanford was re-evaluating his association with West Indies cricket.

Stanford was thereafter charged by the USA’s Securities and Exchange Commission (SEC) of a "fraud of shocking magnitude."

How will the game of cricket face this mega global scam that would affect it indirectly?

A fun-loving Allen Stanford, who has been accused many a time of keeping on his lap the wives and girlfriends of some of the cricketers who took part in his tournaments, while watching cricket matches, could be named in economic terms the ‘Texan Sakvithi’ who made a mockery of the game of cricket with his dubious lucre.

The feds admitted Wednesday that they have lost a flamboyant billionaire whose secretive off-shore banking empire turned out to be a giant racket.

Panicking small depositors and well-heeled South American investors alike were turned away when they rushed to try to get their money back.

Sir Allen Stanford, a mustachioed Texas tycoon who moved to the Caribbean island of Antigua to duck taxes, went on the lam just before the Securities and Exchange Commission announced Tuesday that he was being charged with an $8 billion ripoff similar to Bernie Madoff’s Ponzi scheme.

Rose Romero of the SEC called it "a fraud of shocking magnitude that has spread its tentacles throughout the world."

News of Stanford’s chicanery and escape prompted bank runs in Venezuela, Colombia and Ecuador.

On Antigua, hundreds of small depositors lined up outside the Stanford-owned Bank of Antigua hoping to rescue their savings. His swankier customers arrived by private jet.

All were told the bank’s assets were frozen.

Prime Minister Baldwin Spencer went on TV to assure the island’s 70,000 residents not to panic. Then he said "the fallout threatens catastrophic and immediate consequences."

Stanford, 58, is a Houston native who became a major patron of English cricket and had himself knighted by the Antiguans.

He lavished Washington pols with $7 million in donations, getting them to ease regulations on foreign tax havens and kill a 2002 measure to crack down on money-laundering.

Wall Street was buzzing with rumors of drug and CIA links, and speculation was rife over who would find Stanford first: the feds or swindled coke lords.

Sky-high returns that investors found hard to resist

David LeBoeuf has known the Texan billionaire Allen Stanford since his schooldays. He says that his friend is "the kind of person that doesn’t worry what other people think".

That is just as well, because plenty of people think that there is something fishy about Mr Stanford’s financial empire.

Lodis Stanford, his grandfather, started the first Stanford Company, an insurer, in the small town of Mexia in 1932, at the height of the Depression. By the time that Mr Stanford took over the business in 1993 he had already shown a head for business, having made a fortune from buying cheap properties during a collapse in the Texan economy in the 1980s and selling them later for a big profit.

When he took over the family company, it was mainly involved in insurance and property. He expanded the business rapidly, moving into wealth management and pushing into new territories such as South America. One of the company’s most recent projects was a $2 billion fund to invest in luxury Caribbean developments. Mr Stanford attributed his rise to become America’s 205th-richest man, with a $2.2 billion fortune, to his adherence to his grandfather’s philosophy of "hard work, clear vision and value for the client".

At its peak, Stanford Financial Group had customers in 140 countries, with $50 billion worth of assets under management. That involvement in wealth management and knowledge of emerging markets allowed Mr Stanford and his associates allegedly to conduct an elaborate fraud.

Stanford International Bank, based in Antigua, is at the centre of the suspected fraud. The bank’s main product is certificates of deposit, on which a fixed amount of interest is paid over a set period, ranging from three months to as long as five years.

The bank’s certificates of deposit paid stratospheric returns compared with those offered by its rivals, with some investors receiving interest of as much as 16 per cent on their investment. Other banks with similar products offered interest rates of closer to 2 per cent. Such generous returns attracted a flurry of customers, who were required to make a minimum investment of $50,000.

Stanford International Bank’s customers believed that their money was invested in highly liquid assets that could be easily sold at any time if they required the return of their deposits.

Instead their money was allegedly moved from the bank, which has about $8.5 billion of assets and 30,000 customers, to Stanford’s Houston-based fund management business.

It was unclear yesterday what proportion of the returns on offer at Stanford International Bank were actually generated by the genuine investment of customers’ assets.

Mr Stanford is accused of offering falsified returns and lying about his investors’ exposure to Bernard Madoff, the New York fund manager who is accused of running a $50 billion "Ponzi" scheme, in which investors are repaid from new deposits.

He is also accused of defrauding a second group of investors by using old performance statistics to sell a mutual fund investment product, generating $25 million in fees for his company.

Asked last year by the television channel CNBC whether it was fun to be a billionaire, he replied: "Yes, yes, yes, I have to say it’s fun. But it’s hard work."

If the American authorities are correct, the hard work he referred to was not quite what Mr Stanford’s customers imagined.

February 17, 2009: The Securities and Exchange Commission today (Tuesday, Feb. 17) charged Robert Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an $8 billion CD program.

Stanford’s companies include Antiguan-based Stanford International Bank (SIB), Houston-based broker-dealer and investment adviser Stanford Group Company (SGC), and investment adviser Stanford Capital Management. The SEC also charged SIB chief financial officer James Davis as well as Laura Pendergest-Holt, chief investment officer of Stanford Financial Group (SFG), in the enforcement action.

Pursuant to the SEC’s request for emergency relief for the benefit of defrauded investors, U.S. District Judge Reed O’Connor entered a temporary restraining order, froze the defendants’ assets, and appointed a receiver to marshal those assets.

"As we allege in our complaint, Stanford and the close circle of family and friends with whom he runs his businesses perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors," said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. "We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve assets for investors."

Rose Romero, Regional Director of the SEC’s Fort Worth Regional Office, added, "We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world."

The SEC’s complaint, filed in federal court in Dallas, alleges that acting through a network of SGC financial advisers, SIB has sold approximately $8 billion of so-called "certificates of deposit" to investors by promising improbable and unsubstantiated high interest rates. These rates were supposedly earned through SIB’s unique investment strategy, which purportedly allowed the bank to achieve double-digit returns on its investments for the past 15 years.

According to the SEC’s complaint, the defendants have misrepresented to CD purchasers that their deposits are safe, falsely claiming that the bank re-invests client funds primarily in "liquid" financial instruments (the portfolio); monitors the portfolio through a team of 20-plus analysts; and is subject to yearly audits by Antiguan regulators. Recently, as the market absorbed the news of Bernard Madoff’s massive Ponzi scheme, SIB attempted to calm its own investors by falsely claiming the bank has no "direct or indirect" exposure to the Madoff scheme.

According to the SEC’s complaint, SIB is operated by a close circle of Stanford’s family and friends. SIB’s investment committee, responsible for the management of the bank’s multi-billion dollar portfolio of assets, is comprised of Stanford; Stanford’s father who resides in Mexia, Texas; another Mexia resident with business experience in cattle ranching and car sales; Pendergest-Holt, who prior to joining SFG had no financial services or securities industry experience; and Davis, who was Stanford’s college roommate.

The SEC’s complaint also alleges an additional scheme relating to $1.2 billion in sales by SGC advisers of a proprietary mutual fund wrap program, called Stanford Allocation Strategy (SAS), by using materially false historical performance data. According to the complaint, the false data helped SGC grow the SAS program from less than $10 million in 2004 to more than $1 billion, generating fees for SGC (and ultimately Stanford) of approximately $25 million in 2007 and 2008. The fraudulent SAS performance was used to recruit registered investment advisers with significant books of business, who were then heavily incentivized to reallocate their clients’ assets to SIB’s CD program.

The SEC’s complaint charges violations of the anti-fraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act, and registration provisions of the Investment Company Act. In addition to emergency and interim relief that has been obtained, the SEC seeks a final judgment permanently enjoining the defendants from future violations of the relevant provisions of the federal securities laws and ordering them to pay financial penalties and disgorgement of ill-gotten gains with prejudgment interest.

The Commission acknowledges the assistance and cooperation of the Financial Industry Regulatory Authority (FINRA) in connection with this matter.

The SEC’s investigation is continuing. FINRA independently developed information through its examination and investigative processes that contributed significantly to the filing of this enforcement action.

Panicked savers on Wednesday rushed to withdraw money from banks in Antigua and Venezuela linked to Sir Allen Stanford, the Texan billionaire charged by US securities regulators with "massive" investment fraud.

The US Securities and Exchange Commission accused Sir Allen on Tuesday of operating an alleged $8bn scheme involving certificates of deposits sold through Stanford International Bank, in Antigua, that allegedly promised "improbable and unsubstantiated high interest rates".

The probe into the Houston-based Stanford Financial Group could widen, with the Federal Bureau of Investigation conducting a probe, according to people close to the situation.

In Antigua, where SIB is based, the authorities attempted to calm locals who lined up at the Bank of Antigua in St John’s to demand their money. Bank of Antigua is part of Sir Allen’s financial empire on the island but it does not figure in the SEC’s complaint. The Eastern Caribbean Central Bank, the monetary authority for eight islands including Antigua, said it had sufficient reserves to deal with any fallout and assured depositors their money was safe.

"There was a mad rush at the bank...people felt the need to safeguard their money," said Susan Noyce, editor of Regional Publications Limited, which publishes the local telephone directory and various business magazines.

Sir Allen, whose whereabouts were still unknown to investigators on Wednesday night, was reported by CNBC to have tried to hire a private jet to fly from Houston to Antigua.

It emerged that, contrary to SIB assurances, at least $400,000 of the bank’s assets were exposed to Bernard Madoff, the US broker-dealer accused in December of perpetrating an alleged $50bn Ponzi scheme.

The SEC’s complaint said SIB had money invested in Meridian, a New York-based hedge fund that used Tremont Partners as its asset manager. Tremont invested 6-8 per cent of the SIB assets they indirectly managed with Madoff’s investment firm.

The complaint details how SIB’s problems started growing before the regulator’s action this week. In December, Pershing, a clearing firm, told SIB it would no longer wire funds from Stanford Group Company to the bank because the bank had not given financial details as requested.

In recent weeks, the regulator said it had noticed liquidation by SIB of the funds, with the bank seeking to remove more than $178m from its accounts.