Allen Stanford may have received earlier protection from the SEC by working as a drug trade informant, a BBC investigation has found. The accused fraudster’s bank paid $3.1 million to the DEA a decade ago as a middleman for a Mexican drug lord, and in 2006 an SEC investigation into potential Ponzi operations was dropped, allegedly at the request of another government agency.
The BBC says it has "strong evidence" that Stanford was a confidential agent for the DEA as early as 1999, turning over details of money laundering from clients in Colombia, Mexico, Venezuela, and Ecuador. While the SEC has now brought civil charges against Stanford and frozen the assets of his Antigua-based bank, he still has not been charged with any criminal wrongdoing. The DEA refused to comment.
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