On first blush, the criminal case against Sir Allen Stanford, the mercurial chairman of Stanford Financial Group, would appear to be pretty straightforward.

On the other hand, why was the Securities and Exchange Commission apparently falling over itself for years to avoid closing down Stanford Capital, even in the face of credible, inside information provided to the agency regarding Stanford’s scam nature?

Could Sir Allen have been keeping the regulators at bay by playing several agencies of the federal government off against one another?:

A Panorama (BBC) investigation has suggested that Sir Allen was shielded from an earlier inquiry into his activities because he co-operated with a US Drug Enforcement Administration (DEA) attempt to track money laundering by Latin American drug cartels. [. . .]

Panorama claimed some US officials were aware of Sir Allen’s cartel links as long ago as 1990. It reported that Sir Allen, paid a $3.1 million (£2.05 million) cheque to the DEA in 1999 after that sum was invested in his bank by another Mexican drug gang, the Juarez cartel of Amada Carillo Fuentes.

According to Panorama, whose investigation will air on Monday, Sir Allen was initially investigated by the SEC over suspicions he was running a Ponzi scheme in the summer of 2006, but the inquiry was over by the winter of that year.

The BBC claims the decision to close the investigation followed a request by another government agency.

Panorama says it is aware of "strong evidence" that Sir Allen was a "confidential agent" for the DEA as far back as 1999 and turned over details of money laundering by clients from Colombia, Mexico and Ecuador.

Rodney Gallagher, a British financial investigator, who knew Sir Allen in the 1980s said it was clear to him that the Texan had "a very close relationship with the DEA" and occasionally hired former agency staff to work for him.

The DEA declined to comment to the BBC on its allegations.  .   .  .

If Sir Allen bought time for a scam by playing nice with the DEA, the federal government’s dubious prohibition policy toward certain drugs will have added an entirely new layer of costs.