Texas financier Allen Stanford was tracked down yesterday in Virginia, where Federal Bureau of Investigation (FBI) agents served him with legal papers in a multibillion-dollar fraud case.

FBI agents, acting at the request of the Securities and Exchange Commission (SEC), served Stanford papers in Fredericksburg, Virginia, said FBI spokesman Richard Kolko.

Stanford is not under arrest and is not in custody.

In a civil papers Tuesday, the SEC alleged Stanford and three of his companies committed US$8-billion fraud that lured investors with promises of improbable and unsubstantiated high returns on certificates of deposit and other investments.

Until regulators got help Thursday from the FBI, the SEC had not been able to find Stanford.

A law enforcement official said the billionaire was served around 1:45 p.m. while sitting in a car. Authorities do not believe he had been purposely hiding or fleeing.

Under the terms of the court case, Stanford had to surrender his passport. The official spoke anonymously because he was not authorised to discuss specifics of the case.

The fallout from the fraud case is already rattling around the global financial system.

Venezuela yesterday seized a failed bank controlled by Stanford after a run on deposits there, while clients were prevented from withdrawing their money from Stanford International Bank and its affiliates in a half-dozen other countries.