Venezuela Seizes Stanford Bank, Calls It Healthy

Country provided up to 30% of group's funds
By Kevin Spak,  Newser Staff
Posted Feb 19, 2009 9:56 AM CST
A customer of Stanford Bank speaks on the phone outside of a bank office in Caracas, Wednesday, Feb. 18, 2009.   (AP Photo/Howard Yanes)
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(Newser) – Venezuela has taken control of a bank run by alleged fraudster R. Allen Stanford and his Stanford International Group, the New York Times reports. A banking regulator said the retail bank is essentially healthy, but Venezuelans are still fretting. “When Venezuelan forces say nothing is wrong,” explained one insurance broker, “it means that something is wrong.”

Stanford moved heavily into Venezuela in 2005, even as most companies were fleeing the country as Hugo Chavez began his nationalization spree. The business took off, as Venezuelans looked to turn their oil cash into dollars and park it offshore. One economist estimates that as much as 30% of Stanford’s $8 billion in reported assets last year came from Venezuelans.