The SEC’s allegations against Sir Allen Stanford have illustrated the  complex and often adversarial relationships between regulators, governments and quasi-governmental bodies, courts and individuals involved.

Over the weekend, the BBC obliquely suggested that the US Drug Enforcement Administration (DEA) had asked the SEC to “stand down” from a 2006 investigation into the businessman’s affairs:

[Sir Allen] was initially investigated by the SEC for running a possible Ponzi fraud in the summer of 2006, but by the winter of that year the inquiry was stopped.

Panorama understands that the decision was taken because of a request by another government agency.

Panorama is aware of strong evidence that Sir Allen was a confidential agent of the DEA as far back as 1999 – the year he made out the $3.1m cheque to the DEA.

There is also the ongoing cold war – being fought both in the press and in a series of court filings – between the receivers appointed to administer the affairs of the Stanford group: Ralph Janvey in the US, and Nigel Hamilton-Smith of Vantis in Antigua.

Regulatory officials in Antigua and the US have yet to find a way to effectively – or at least formally – cooperate.

And in the most recent development, the IRS is disputing the authority of the Antiguan receiver – which is also acting as a liquidator for the island-based Stanford businesses. The IRS has asked a judge to block a request by Hamilton-Smith and Vantis to pursue Sir Alllen’s assets through the US court system. Why?

The IRS contends that the request, if granted, would make it more difficult (if not impossible) to recover the more than $200m in back taxes it claims is owed by Sir Allen.

In court documents released on Monday, the IRS also accused Hamilton-Smith and Vantis of spoiling computer records at an office of the Stanford group in Canada.

Janvey, the US-appointed receiver, made a similar claim in a filing last month:

The Receiver also obtained information suggesting that, before issuance of the ex parte recognition order, representatives of the Antiguan receivers entered [the Montreal offices of Stanford International Bank] and purposely “wiped” SIBL’s servers there, after first imaging the servers and sending the copy images to Antigua, and out of the jurisdiction of Canadian courts.

Janvey, too, is seeking to block the request by his Antigua-appointed counterparts to pursue Sir Allen’s assets through US courts. In a typically take-no-prisoners filing on Monday, he argues:

The Antiguan Liquidators have asked this Court to amend its Receivership Order  to permit them to file a petition for recognition as liquidators of the Stanford International Bank,  Ltd. (“SIB”) under chapter 15 of the Bankruptcy Code. They seek to fracture this Receivership  by taking exclusive possession and control of all assets and records of SIB and all assets  traceable to the sale of SIB certificates of deposit (“CDs”), which includes assets the Receiver  has marshaled for the benefit of all Stanford claimants. In Antigua, these assets would be distributed to SIB claimants, but not any other Stanford claimants.

When the Antiguan Liquidators devise a distribution plan, it will have to be approved by a court that refuses to  recognize this Court’s jurisdiction or the Receiver’s authority. Moreover, the Antiguan liquidation proceedings may be hijacked by the Antiguan government, which is a major debtor of the Receivership Estate, and which has recently taken all but the final action necessary to expropriate real estate worth millions of dollars for a “public purpose” that is difficult or impossible to determine.

All the parties involved are, at least in theory, working toward the same goal. In practice, their inability to work together has hampered the investigation, insiders told FT Alphaville.

Sir Allen has strenuously denied the allegations against him.

This entry was posted by Stacy-Marie Ishmael on Monday, May 11th, 2009 at 19:24 and is filed under Capital markets, People. Tagged with ralph janvey, Sir Allen Stanford, Stanford International Bank, Vantis. Edit this entry.