A court-appointed receiver filed suit Friday against jailed financier R. Allen Stanford, asking return of $1.8 billion loaned to him since 1999.
The lawsuit filed in North Texas U.S. District Court claims that across the years, Stanford rarely earned any income outside what he was loaned from Stanford International Bank Ltd.’s certificate of deposit sales. He also never repaid the money, it says.
Stanford was chief executive officer of Stanford Financial Group and its affiliates until early 2009, when the international financial empire came crashing down under the weight of a U.S. Securities and Exchange Commission investigation.
He, four Stanford executives and an Antiguan bank regulator were indicted on multiple charges that they ran or participated in a $7.2 billion Ponzi scheme on CD investors.
The lawsuit says the investors numbers 50,000 in 100 countries. Scores of Mississippians were among them and lost their retirement funds and life savings.
Stanford, who is in jail, is set to go on trial Sept. 12 in Houston, Texas. The others are expected to be tried afterward.
They all pleaded not guilty, except former COO James M. Davis, who pleaded guilty later in 2009 and will testify against them.
The new lawsuit insists that at least since 1999, Stanford’s financial empire was insolvent. It also insists that each payment of CD proceeds to him was “made with actual intent to hinder, delay and defraud” its creditors.
Ralph Janvey, the receiver, said he’s still seeking records from Antigua and Switzerland, where a “secret” account disbursed money to Stanford.
He also says that at the time SIB was placed into receivership in Februrary 2009, the bank was insolvent by more than $6 billion.
“R. Allen Stanford was either unable to repay principal or interest on the loans or never intended to do so,” the lawsuit states.
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