In a revelation that has sent shockwaves through the online gambling sector of Antigua, news broke that the Caribbean nation's top bank regulator had been paid $100,000 by Allen Stanford to conduct fake audits and mislead U.S. investigators, according to an indictment unsealed Friday.

"This will hurt Antigua's reputation in the world of banking and online gambling," said Payton O'Brien, Senior Editor of the Gambling911.com website.  "For year's Antigua was known as the first jurisdiction to license Internet gambling companies through fairly stringent terms and a rather large regulatory fee.  The nation also worked hard to erase its image as a haven for hiding monies offshore."

In recent years, Antigua has fought the US successfully through the World Trade Organization, which found that the United States violated International trade law through its prohibitive measures against online gambling.

Federal prosecutors this week said the alleged bribes helped Stanford and colleagues conceal an elaborate Ponzi scheme that lured about 30,000 investors, many in the U.S.

Stanford, three executives of his firm and Leroy King, the former chief bank regulator of the nation of Antigua and Barbuda, were indicted Thursday on fraud and obstruction charges.

According to the indictment, the Securities and Exchange Commission began investigating Stanford Financial Group and inquiring about Antigua's financial regulators.

King, a dual citizen of Antigua and Barbuda and the U.S., has been suspended from his post. The U.S. is seeking his extradition from Antigua, however, that island nation does not have an extradition treaty with the United States. 

Jagajeet Chiba, Gambling911.com