DALLAS — The lawyer in charge of unraveling jailed financier R. Allen Stanford’s businesses is asking a federal court to pay his team nearly $9 million for three months of work.
Court-appointed receiver Ralph Janvey filed a motion with a federal court in Dallas last week, seeking about $8.9 million in fees and expenses for work from June through August.
Janvey and his team of lawyers and consultants are winding down Stanford’s businesses and searching for billions of dollars the government says went missing in a Ponzi scheme allegedly run by the Texas billionaire and his associates. Stanford, who is jailed in the Houston area, has denied the allegations.
If this latest fee request is approved, Janvey’s team will have been paid nearly $30 million in fees and expenses. Last month, the court approved $20 million for Janvey’s team for their work from mid-February through the end of May.
The $20 million bill paid to the Janvey team represents about one-fourth of the $81 million Janvey has recovered to return to investors. Janvey and the investors get paid from the same pot of money.
The receiver’s bills have led to an unusual public confrontation with the Securities and Exchange Commission, which recommended Janvey for the job but has balked at his bills. According to court papers, the SEC and court-appointed examiner John Little, who represents jilted Stanford investors, oppose Janvey’s latest fee request.
Little declined to comment, saying he has not yet reviewed the more than 1,000 pages Janvey filed in support of his fees. Neither the SEC nor Stanford attorney Ruth Schuster immediately returned messages.
Janvey said his latest $8.9 million bill represents a 20-percent discount from the usual fees charged by his firm and those he hired. In court papers, he defended the fees as necessary because of the complexity of his job.
“This case is one of the largest and most complex of its kind,” the motion states.
The SEC has accused Stanford and some of his top executives of running a $7 billion scheme by promising inflated returns to more than 20,000 investors on certificates of deposit at his bank in Antigua. Instead of investing the money, Stanford paid off old investors with deposits from new investors, according to the government.
Besides the civil case in Dallas, Stanford and four executives of his now defunct Stanford Financial Group are accused in a criminal indictment in Houston of orchestrating the alleged fraud. Investigators said Stanford secretly diverted more than $1.6 billion in investor funds as personal loans to himself.
Stanford and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt have pleaded not guilty to various criminal charges in Houston, including wire and mail fraud. The three executives are free on bond; Stanford remains jailed.
James M. Davis, Stanford’s former chief financial officer, pleaded guilty to three counts: conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct the investigation.
Jeff Carlton/The Associated Press