By Patsy R. Brumfield/NEMS Daily Journal
DALLAS, Texas – Victims of R. Allen Stanford’s Ponzi scheme will get about 1 cent per dollar lost when his financial empire crashed in early 2009.
U.S. District Judge David C. Godbey on Thursday accepted the plan by Ralph Janvey, the receiver appointed in 2009 to marshal and liquidate Stanford’s personal and business assets, to make a $55 million interim distribution to about 17,000 claimants, or about 1 cent per dollar for the $5.1 billion lost in the fraud scheme.
“We will follow it up in a subsequent distribution as the money comes in,” Janvey’s attorney, Kevin Sadler of Baker Botts LLP, told Godbey at a court hearing in April.
The court agreed that payments will be made pro rata, equal to the percentage of their allowed claims stated in previous “notices of determination.” Victims should expect to get notices from the receiver about how to participate.
By comparison, Ponzi scheme victims of Bernard L. Madoff, who was arrested in December 2008, recovered more than $5.4 billion. Clients of the MF Global Inc. brokerage were paid about $4.9 billion after its parent, MF Global Holdings Ltd., failed in October 2011. Victims of a scheme by Peregrine Financial Group Inc. founder Russell Wasendorf, who prosecutors last year said stole $215 million, received an interim distribution of $123 million.
Prosecutors and agents for the receiver admit few Stanford assets were left to liquidate because he spent so much on lavish homes, yachts and a playboy lifestyle.
Hundreds of Mississippians were among the investors as customers through Stanford offices in Tupelo, Jackson and Memphis.
They lost their life savings and retirement funds when their certificate of deposit investments became worthless with the collapse of the Houston, Texas-based company.
The CDs were purchased through Stanford International Bank Ltd. in the Caribbean, and many investors believed they were insured like U.S. bank deposits, although they were not.
In March 2012, a federal grand jury in Houston convicted 63-year-old Stanford of lying to investors about the nature and oversight of the CDs. The jurors decided he must forfeit $330 million in accounts seized by the U.S. government.
Stanford is serving a 110-year sentence in a federal high-security prison.