Venezuelans tried to evade risk through offshore bank, but found a bust

[Judi Lynn]

Updated: 26 minutes ago
Venezuelans tried to evade risk through offshore bank, but found a bust

By FABIOLA SANCHEZ | Associated Press Writer
5:56 PM EST, February 19, 2009

CARACAS, Venezuela (AP) — Venezuelans sunk at least $2.5 billion into the Antigua-based Stanford International Bank, about a third of the money U.S. regulators hope to recover as they pursue their fraud case against the bank's Texas billionaire founder.

Many wealthy Latin Americans seek safe havens for their money outside their own countries, but Venezuelans had particular reason to be lured by R. Allen Stanford's promises of returns as high as 14 percent.

Strict currency controls, more than 30 percent inflation, high taxes and uncertainty about the socialist projects of President Hugo Chavez drove many to save dollars or euros abroad. Stanford seized on the opportunity, opening bank branches across Venezuela even as other international banks pulled out.

"I've seen it many times: Wealthy Latin Americans are concerned about stability in their countries or in their currencies and they're looking for a way to get their money out," said Ellen Zimiles, an expert in fraud risk management and former assistant U.S. attorney for the Southern District of New York. "But no place is totally safe."

http://www.orlandosentinel.com/business/nationworld/sns-ap-lt-venezuela-stanford,0,4903144.story