Offshore banking experts say that the fraud charges this week against accused financial scammer R. Allen Stanford have been a long time coming.
"There's no surprise at all," said Washington lawyer and IRS consultant Jack Blum. "This man has been on law enforcement's radar screen for the better part of 10 years."
But the SEC didn't move forward until this week, after two former Stanford Financial whistleblowers filed an alleged lawsuit, which revealed how the bank lied about too-good-to-be-true certificates of deposit.
"The problem was the published returns that many advisors use to present to clients and prospects," said former Stanford Group employee Mark Tidwell, "that now we knew that information was incorrect."
"They would lie about it and that behavior just became more and more prevalent," said Charles Well, the other former Stanford Group employee.
But now the SEC's fraud charges may be the least of Stanford's worries. Federal authorities tell ABC News that the FBI and others have been investigating whether Stanford was involved in laundering drug money for Mexico's notorious Gulf Cartel.
Authorities tell ABC News that as part of the investigation, which has been ongoing since last year, Mexican authorities detained one of Stanford's private planes. According to officials, checks found inside the plane were believed to be connected to the Gulf cartel, reputed to be Mexico's most violent gang. Authorities say Stanford could potentially face criminal charges of money laundering and bribery of foreign officials.
Authorities say the SEC action against Stanford Tuesday may have complicated the federal drug investigation. The SEC had been prepared to move in earlier, but was asked to hold off because of the FBI's undercover investigation. But this week, when officials realized Stanford was moving huge amounts of cash out of his bank, they had no choice to move in, even if it jeopardized the drug money case.
The federal investigation, however, did not stop Stanford from using corporate money to become a big man at last year's Democratic convention in Denver.
A video posted on the firm's web-site shows Stanford, now sought by U.S. Marshals, being hugged by Speaker of the House Nancy Pelosi and praised by former President Bill Clinton for helping to finance a convention-related forum and party put on by the National Democratic Institute.
"I would like to thank the Stanford Financial Group for helping to underwrite this," Clinton said to the crowd at the event.
Stanford Financial was listed as the "lead benefactor" for the gathering, and Stanford was permitted to address the audience of several hundred.
Stanford contributed $150,000 to underwrite the event, said NDI president Kenneth Wollack. More recently, Stanford gave $5,000 to help pay for a luncheon hosted by the group. At the time NDI had no idea of Stanford's trouble, and it is has not had any contact with him since the December event, said Wollack.
"We had no reason to believe that a very public company that was also engaged in philanthropic work might be suspect," said a spokesperson for the National Democratic Institute, Amy Dudley.
The SEC charged yesterday that Stanford was running a fraudulent investment scheme that may have bilked customers out of as much as $8 billion.