Sir Allen Stanford, the Texan billionaire accused by US regulators of perpetrating an $8 billion fraud  through his Antigua-based Stanford International Bank, was last night arrested in Richmond, Virginia by federal law enforcement officials, media reports said.

The Justice Department is expected to announce criminal charges today that were returned by a federal grand jury in Houston, the Federal Bureau of Investigation said.

Sir Allen is expected to appear in court to respond to the charges today, reports said.

The allegations against him had emerged as the financial industry was only just beginning to digest the scale of the huge Ponzi scheme fraud perpetrated by the US investor, Bernard Madoff. In his case, the scandal has raised concerns about whether wealth management and other firms carried out sufficient due diligence checks on such operations.