CHRISTIANSTED, U.S. Virgin Islands, (Reuters) – Allen Stanford’s office building has closed, an employee said yesterday, following the reported arrival on the Caribbean island of the court-appointed receiver overseeing the assets of the Texas billionaire, who is facing fraud charges.
An employee at the office on King Street in downtown Christiansted, whose hurricane shutters were closed, would only say the office was not open for business. He referred questions to the Stanford compound on Hill Street, a lavish, 18th-century mansion that once belonged to Danish comedian and pianist Victor Borge.
Phone calls to Stanford Caribbean Investments and Stanford Financial Group Global Management, both located in the yellow-colored mansion, were unanswered.
A Stanford spokesman in New York referred all calls to the U.S. Securities and Exchange Commission. An SEC spokesman could not confirm the situation in St. Croix.
Last week, the SEC filed civil charges against Stanford, 58, two of his colleagues and three of his companies, accusing them of fraudulently selling $8 billion in certificates of deposit with improbably high interest rates from his Stanford International Bank Ltd (SIB), headquartered in Antigua. Regulators in Antigua have seized Stanford’s banks and companies there.
No criminal charges have been brought against Stanford.
Stanford, a well-connected sports entrepreneur, and his affiliates own nearly $31 million worth of commercial and residential property on St. Croix, the largest of the U.S. Virgin Islands, according to public records. He also leases 37 acres of property near St. Croix’s airport where he planned to build a massive office complex, intended to serve as headquarters for support functions for his financial empire.
A spokesman for John deJongh, governor of the U.S. Virgin Islands, told Reuters on Monday he had heard the receiver arrived on Friday and met with employees, but he could not independently verify it.
The St. Croix Avis, the island’s daily paper, reported yesterday that the receiver allegedly halted operations at the King Street office on Friday and told employees to pack up their belongings and go home until further notice, citing an unnamed employee.
Receivers often will close offices for companies they oversee if they feel the cost of running the office outweighs the benefit, said Michael Goldberg, an attorney with Ft. Lauderdale-based Akerman Senterfitt, who has served as the receiver in several fraud cases.
But regarding Stanford’s other assets, such as personal property and a yacht, Goldberg guessed the receiver is on a fact-finding mission right now.
“When you first come into a case you start looking at various places where the person might have had assets or spent significant time,” Goldberg said, so they may eventually end up under the umbrella of the receivership.
Yet the receiver does have power to take control of those assets, pending further court order, Goldberg said.
James Sullivan, the U.S. Marshal for the U.S. Virgin Islands, said yesterday he had not heard anything from the receiver, Dallas lawyer Ralph Janvey, who was appointed by the U.S. District Court in Dallas, Texas.