WASHINGTON, Feb 28, 2009 (AFP) - The US financial regulator has accused Texas financier Allen Stanford of committing a multi-billion-dollar fraud like that of Wall Street swindler Bernard Madoff, documents showed Saturday.

"For at least a decade, R. Allen Stanford and (his accomplice) James M. Davis, through companies they control ... executed a massive Ponzi scheme," the Securities and Exchange Commission (SEC) said in an amended complaint filed with a civil court in Dallas, Texas, a copy of which was obtained by AFP.

A Ponzi scheme, named after a crook in the 1920s, is a pyramid scheme where new investors' money is stolen to pay profits to existing clients.

New York financier Bernard Madoff was accused in December of masterminding a similar scheme for 50 billion dollars.

"In carrying out the scheme, Stanford and Davis misappropriated billions of dollars of investor funds and falsified (Stanford International Bank) SIB's financial statements in an effort to conceal their fraudulent conduct," the SEC added.

The SEC, which has launched accusations against Stanford, said that through their scheme, Stanford and Davis "by February 2009, had misappropriated at least 1.6 billion dollars of investor money through bogus personal loans to Stanford and 'invested' an undetermined amount of investor funds in speculative, unprofitable private businesses controlled by Stanford.

"Stanford and Davis fabricated the performance of the bank's investment portfolio. Each month, Stanford and Davis decided on a pre-determined return on investment for SIB's portfolio," charged the SEC.

"Using this pre-determined number, SIB's internal accountants reverse-engineered the bank's financial statements to report investment income that the bank did not actually earn."

The Houston Chronicle reported that Stanford owed massive back taxes.

Citing public records, the Texas newspaper said the Internal Revenue service (IRS) is seeking 186 million dollars in back taxes and penalties from Stanford.

"The bulk of that, 107 million dollars, stems from personal income taxes Stanford and his estranged wife owe from 2002 to 2004, court documents show. The remainder, 79 million dollars, is on unpaid taxes from 1999 to 2001. The couple is disputing that in US Tax Court," it added.