Stanford receiver pinpoints $1.5bn

Investors in Sir Allen Stanford’s alleged $7bn Ponzi scheme may be able to recover about one-fifth of their principal, according to the receiver appointed by the US courts to administer the estate’s assets.

Sir Allen, who is facing a criminal indictment as well as a civil suit filed by the Securities and Exchange Commission, has denied all the allegations against him.
In a report filed late on Wednesday, Dallas lawyer Ralph Janvey said cash on hand at the Stanford estate totalled $128.8m, and that he was trying to recover a further $894m.
“We have identified over $1.5bn in assets that ultimately could be available to the victims of the Stanford fraud,” he said in a statement. “We may be able to return to them as much as 20 cents on the dollar, just based on activities to date.”
Mr Janvey has been aggressive in his attempts to recover cash and other assets of the complex Stanford empire, which stretched from Houston to Venezuela.
The epicentre of the alleged fraud – Stanford International Bank, which issued high-yielding certificates of deposit to investors around the world – was domiciled in Antigua.
Among the assets listed was Sir Allen’s yacht, the Sea Eagle, which the Texan businessman bought for $3.9m and on which he spent an additional $16m in “upgrades” such as replacing the teak interior with mahogany and putting in a new galley kitchen, according to court papers.
Some of the receiver’s methods – which have included attempts to claw back principal and interest from victims of the alleged fraud and to recoup money paid to former employees – have irked the SEC. The regulator has accused Mr Janvey of overstepping his authority in the matter.
The receiver has also faced criticism regarding his fee requests. Mr Janvey has billed the estate for more than $35m to date, according to court documents. The sum covers the services provided by the receiver and the small army of lawyers, consultants and forensic accountants assisting in the recovery effort, which began in February.
According to the report, more than 40 per cent of the cash on hand has been allocated towards covering those operational and professional expenses.
John Little, the examiner appointed to represent the interests of the Stanford investors, has objected to Mr Janvey’s requests, noting the fees will have to be paid out of the limited cash pool that will ultimately be used to reimburse depositors. Mr Little opposed the receiver’s clawback requests on similar grounds, saying the costs of litigation would likely outstrip the cash recovered.
Kent Shaffer, Sir Allen’s criminal defence attorney, told the Financial Times the receiver and his colleagues were “looting the revenues” of the Stanford companies.
Mr Janvey told the FT the criticisms were “simply part of a tired and fruitless effort to shift attention away from Stanford, who is responsible for a worldwide multibillion dollar financial fraud that has hurt tens of thousands of people”.