Florida regulators turned blind eye to financier's schemes

MIAMI _ Desperate to prop up Allen Stanford's financial empire, his Miami brokers jetted to South America with a sales pitch they said would deliver gold to investors: Invest in the Miami bank and reap spectacular returns.

There was just one catch: Allen Stanford didn't have a bank in Miami.

When regulators in Ecuador caught wind of the scheme in 2005, they banned Stanford's employees from selling their prime investments and threatened legal action.

But in Florida, where Stanford's operation was rooted, regulators weren't even watching.

Florida investigators, in fact, were among the slowest to respond to the massive fraud that prosecutors charge fleeced $7 billion from investors around the world _ most of the money now missing.

The crisis in Ecuador revealed major breakdowns in Florida's enforcement system at a time the Miami office was generating hundreds of millions a year for Stanford's questionable ventures, The Miami Herald found.

It exposed the office's heated campaign to recruit new clients _ and raise millions _ while breaking state banking laws.

And it shook the foundation of Stanford's financial network years before it was shut down by federal agents.

For years, brokers from the Miami office flew to Ecuador, cutting deals and sending the money to Stanford's Antigua bank _ the records later shredded at the Miami office.

"They were breaking our laws," said Diego Garces, a lead agent for the Ecuador agency that investigated the case.

The Miami center opened under a special arrangement with Florida regulators in 1998 as a foreign trust representative office _ the only one of its kind.

Because the unit was allowed to operate without any regulation _ including fraud checks _ there was no crackdown in Florida, records show.

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