Allen Stanford, the billionaire Texas banker, has been charged with orchestrating a fraudulent, multibillion dollar investment scheme, the SEC announced in a press release this morning.

An SEC spokeswoman called it "a fraud of shocking magnitude that has spread its tentacles throughout the world."

There's also more detail on Stanford's alleged scheme, which seems to have involved selling certificates of deposit worth $8 billion based on fraudulent returns.

From the release:

The SEC's complaint, filed in federal court in Dallas, alleges that acting through a network of SGC financial advisers, SIB has sold approximately $8 billion of so-called "certificates of deposit" to investors by promising improbable and unsubstantiated high interest rates. These rates were supposedly earned through SIB's unique investment strategy, which purportedly allowed the bank to achieve double-digit returns on its investments for the past 15 years.

According to the SEC's complaint, the defendants have misrepresented to CD purchasers that their deposits are safe, falsely claiming that the bank re-invests client funds primarily in "liquid" financial instruments (the portfolio); monitors the portfolio through a team of 20-plus analysts; and is subject to yearly audits by Antiguan regulators.

There's also a possible connection to the Bernard Madoff case. The release continues:

Recently, as the market absorbed the news of Bernard Madoff's massive Ponzi scheme, SIB attempted to calm its own investors by falsely claiming the bank has no "direct or indirect" exposure to the Madoff scheme.

The release does not give details as to the nature of that exposure.

But there are other details reminiscent of Madoff:

Others charged along with Stanford are James Davis, the chief financial officer for Stanford International Bank (the wing of Stanford's financial empire implicated in the alleged fraud) and Laura Pendergest-Holt, chief investment officer of Stanford Financial Group.

According to the release, Pendergest-Holt had no financial services or securities industry experience before joining Stanford. And Davis was Stanford's college roommate.

In the same vein, the agency notes that the investment committee for Stanford International Bank "is comprised of Stanford; Stanford's father who resides in Mexia, Texas; another Mexia resident with business experience in cattle ranching and car sales." That committee is charged with managing the bank's multi-billion dollar portfolio of assets.

And according to the New York Times' examination of the complaint itself, the SEC acted after it subpoenaed Stanford and Davis for testimony and documents that would help account for $8 billion in assets, and received no response.

As for Pendergast-Holt, the chief financial officer, she claimed that only Stanford and Davs had access to the bank's assets.

Separately, Reuters just reported that about 15 people, some wearing jackets identifying them as U.S. marshals, were seen entering Stanford's Houston office this morning.