Sir Allen backed the high profile Twenty20 cricket tournament
The company appointed to liquidate the Antiguan arm of Sir Allen Stanford's financial empire says there is "an enormous shortfall" in its accounts.
The liquidators for Stanford International Bank, Vantis, said the bank was unlikely to have enough to repay $7bn (£4.7bn) owed to investors.
It could take years for any money to be returned, Vantis told the BBC.
In a recent interview, Sir Allen said none of his investors had lost money and protested his innocence.
But speaking to Radio 4's PM programme, Nigel Hamilton-Smith from liquidators Vantis Business Recovery Services, said that by claiming that investors' money was safe, Stanford was being "economical with the truth".
Stanford International Bank was based in Antigua but had 27,000 clients from all over the world, with many based in Southern and Central America.
Sir Allen Stanford has been issued with civil proceedings by the US financial regulator, the Securities and Exchange Commission, but has yet to be charged with a criminal offence.
However, Mr Hamilton-Smith said that other authorities are investigating Sir Allen and that he expected criminal charges to follow.
Last week, Sir Allen said in an interview that his business was not a Ponzi Scheme and that none of his clients had lost any money.
He also threatened to punch anyone who repeated allegations that he was involved in the laundering of drug money from Mexico.
Preparing a defence
Stanford has had his assets frozen by a court appointed receiver and had said that he did not have enough money to afford a lawyer.
Since then, he has appointed Dick DeGuerin, a well known criminal lawyer, to help prepare a defence.
He is expected to face charges in the US, but other authorities are also thought to be looking into cases against him.
Sir Allen came to prominence last year when he sponsored a high-profile Twenty20 cricket tournament, which culminated in a match between England and an all-stars West Indies team that gave each winning player $1m.
Since then, the England and Wales Cricket Board has severed contact with Mr Stanford.
His property in the Caribbean state of Antigua and Barbuda, where many of his business interests are based, has already been seized by the islands' government.