Courts & Crime

U.S. financier sought help from Libya as empire collapsed

ST. CROIX, U.S. Virgin Islands -- With federal agents mounting a probe into his offshore bank, billionaire Allen Stanford drove up a dirt road, hauling records from his headquarters to the top of a lush, tropical mountain.

As the sun set over the island, the banker stuffed the papers into a steel drum, poured gasoline over the top and sparked a fire -- the flames rising into the sky.

Months before his businesses exploded in February in a $7 billion fraud case, Stanford embarked on a mission to hide his financial records while trying to raise money to keep his banking empire alive.

He would jet off to Libya to try to convince government leaders to invest in his offshore institution.

He would even buy two Caribbean islands -- flipping the properties four times to inflate the value of the land and pump up the bank's assets.

"He was desperate,'' said Jonas Hagg, a longtime Fort Lauderdale executive chef who lived on Stanford's yacht. ``You never knew from day to day what was going to happen. He was flying by the seat of his pants.''

Details of the final days of Stanford's banking network, from court filings and interviews with a dozen staff members, offer the most complete picture so far of how he plundered his customers' accounts, pouring the money into failing stocks and botched real-estate deals.

He destroyed key records, creating gaps that continue to stymie federal agents trying to recover money for 21,500 fleeced investors.

As his financial network was collapsing, the once gregarious banker was turning into an angry employer, drinking heavily and bickering with his top officers, say staff members.

During a fight with the Antiguan government, he smashed bottles and his fists against the mahogany walls of his 112-foot yacht, Sea Eagle.

After spending nearly $20 million on two luxury estates in Miami and St. Croix -- pouring hundreds of thousands into renovations -- Stanford tore both houses to the ground within months of each other, making a one-bedroom apartment his only home.

By the time federal agents shut down his operations in February, the 59-year-old banker was in Washington, D.C., on his private jet with just one suit to wear and a credit card that had already been canceled.

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