Stanford investors have until Sept. 1 to file claims

By Ronnie Crocker 

Published 06:54 p.m., Monday, May 7, 2012 

 

People who lost money in the R. Allen Stanford investment scheme could see a plan in place by year's end to begin recouping a fraction of their losses, an attorney for the court-appointed receiver said Monday.

"There's now a structure and a process for those who have claims," said Kevin Sadler of Baker Botts, lead counsel for the receiver, Dallas lawyer Ralph Janvey.

U.S. District Judge David Godbey of Dallas, who is overseeing the receivership, on Friday approved a formal claims process that sets a Sept. 1 deadline for new claimants. Sadler called the ruling a "key milestone" because it allows Janvey to get an accurate count of how many claims are out there.

Once the deadline passes, Janvey can prepare a recommendation for how to distribute the funds.

The concern is that investors - many already confused not only by the intricacies of the fraud scheme but also the various groups injecting themselves into the fight over assets - will think the ruling means a check is imminent.

When that check comes, she said, it could be for as little as 2½ cents on the dollar after the receiver's fees and costs of distributing the funds are deducted.

"The investors can't win for losing in this case,"

Sadler agreed that defrauded investors are not likely to collect more than a fraction of their losses. There wasn't much Stanford money left by the time investigators cracked down just over three years ago.

In March, a Houston jury convicted Stanford, 62, a Mexia native, on 13 counts that accused him of orchestrating an international fraud, mostly through certificates of deposit issued by his Stanford International Bank on the Caribbean island of Antigua. Trials are pending against three other executives of Houston-based Stanford Financial Group and an Antiguan financial regulator.

At the time the U.S. Securities and Exchange Commission began shutting down the Stanford empire in February 2009, more than $7 billion in certificates of deposit were on the books. But investigators could track down only about $500 million in assets scattered in a dozen or so locations worldwide.
Now, more than $300 million of that is being targeted by liquidators in Antigua who are at odds with the U.S. court and the Department of Justice.

In a letter to the Justice Department dated last Thursday, the Antiguan liquidators proposed they "initially retain" up to 20 percent of the assets - more than $60 million - to continue the liquidation effort there.

Sadler called that sum unjustifiable and noted that the Justice Department is already on board with the U.S.-approved receiver.

"It is sad that the Antiguan liquidators continue to block the return of the frozen assets to the United States, all because they want $60-plus million to 'finance' their operations," he said.
So far, investors have contacted the U.S. receiver with about $2 billion in claims. Sadler said those people will not have to resubmit claims to meet the Sept. 1 deadline.


ronnie.crocker@chron.com