People queue outside the Bank of Antigua, owned by the Stanford Group, early on Wednesday © PA Photos

After 48 hours below the radar, Allen Stanford has been located in Virgina and served with the complaint from the Securities and Exchange Commission by FBI officials. An FBI spokesman said Stanford had not been charged and had surrendered his passport.

"The agents served Mr Stanford with court orders related to the SEC civil filing against the Stanford Financial Group," FBI spokesman Richard Kolko said in a statement. However, he refused to comment on whether Stanford had alerted authorities regarding his whereabouts or was traced by other means to a place near Fredericksburg, Virginia, around 50 kms south of Washington.

This news emerged even as raids continued on his offices across the US and investors and depositors queued up to recover their money from his various companies.

On Wednesday, Stanford, who has been accused of being involved in an US$8 billion fraud, allegedly attempted to hire a private jet to fly him from Houston to Antigua, but his credit card was declined and the hire company insisted on a wire transfer. Stanford's accounts were frozen on Tuesday.

Stanford's influence even extended to the political arena in the USA where his corporate body was involved in donations towards campaigns of various politicians, who are now lining up to return the money given to them by the Stanford Financial Group (SFG), AFP reported. According to the Center for Responsive Politics, the SFG gave US$2.4 million to political parties, committees and more than 100 political candidates since 2000, including $31,750 to President Barack Obama when he was senator, the third-highest sum among lawmakers. His rival in the presidential election campaign, Republican Senator John McCain, as reported by the center, received $28,150 from the SFG. The Chicago Tribune reported that the money, according to the recipients, was intended for charity purposes.

Over the past couple of days thousands of ordinary people who had invested in his companies or put their money in his banks formed long queues formed outside the Bank of Antigua in St John's and other places in a bid to to withdraw cash despite assurances that the bank had enough money to meet all its liabilities.

Faced with widespread anxiety on the island, where Stanford employs more than 5% of the total workforce, Antigua's prime minister, Baldwin Spencer, went on television to urge people to remain calm although he admitted the scandal could have "catastrophic" consequences.