By Patsy R. Brumfield/NEMS Daily Journal
DALLAS, Texas – Victims of R. Allen Stanford’s massive investor fraud may be a step closer to recovering some part of the $7.2 billion they lost when his empire collapsed in 2009.
Tuesday, his Antiguan-appointed liquidators agreed to stop their feud with the U.S., which may allow defrauded investors to recover some $300 million in assets stashed outside the U.S.
Still, additional approvals are necessary, authorities say.
“The funds that are the subject of this agreement represent the largest available source of investor money that Allen Stanford had not already spent by the time his Ponzi scheme collapsed,” said Kevin Sadler, lead attorney for U.S. receiver Ralph Janvey, said in an e-mail to Bloomberg News. “In the absence of this agreement, these funds would remain out of reach of the Stanford victims for years to come.”
While Stanford’s financial empire was headquartered in Houston, Texas, the fake CDs were sold by Stanford International Bank Ltd. in Antigua.
By dropping their dispute with Janvey and the U.S. Justice Department, the Antiguan liquidators will receive $36 million of Stanford’s frozen funds in the U.K., according to a statement jointly released by both receivers today.
The Antiguan liquidators have already received $20 million from the U.K. accounts.
Janvey recently proposed a $50 million interim distribution be paid to investors, pending court approval.
Angie Shaw, a founder of the Stanford Victims Coalition, denounced the agreement as “ransom” that rewards the Antiguan liquidators at the investors’ expense.
“While the agreement does end a four-year international turf war that has cost the victims untold millions of dollars, the only true beneficiary of the agreement is the Antiguan liquidators,” Shaw told Bloomberg.
While Janvey was awarded control over all Stanford assets by the Dallas judge in charge of the U.S. Securities and Exchange Commission case against Stanford, courts in the U.K., Switzerland and Canada initially awarded control of about $320 million in foreign accounts the Antiguan liquidators.
The Justice Department placed an administrative hold on the European funds, and it has been trying to regain the money since Stanford and his co-conspirators were convicted last year.
About $23 million in Canadian funds and $132.5 million in Swiss funds will be transferred to the Justice Department and Janvey for distribution to investors through a system the U.S. receiver is establishing, according to the joint statement.
Courts in the U.S., Antigua and the U.K. must still sign off on the deal before any funds are transferred, according to the statement.