Open Letter From Stanford Receiver Dated February 14, 2014

Stanford Financial Group Receivership 

 1029 State Highway 6 North I Suite 650-272 1 Houston, TX 77079 

 Phone 866.964.6301 

 February 14, 2014

 To All Those Affected by the Stanford Fraud:

 It has been five years since the Court appointed me as Receiver to unwind the world-wide Ponzi scheme perpetrated by Allen Stanford and those who aided, abetted and enabled him. I know that these continue to be very difficult times for the thousands of you whose lives were impacted, and in many cases devastated, by the Stanford fraud. Even though my team and I have worked hard and made much progress over the last 5 years, the process of unwinding the fraud and the pace of recovering money have been frustratingly slow. Unfortunately, the costs associated with this process have been substantial. Although many challenges still lie ahead, the entire Receivership team and I are committed to working as hard as we can to recover as much money as we can for the eligible claimants.

To read the full transcript click here.


For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/

Control over ex-tycoon Stanford's assets at issue

By JUAN A. LOZANO, Associated Press 

HOUSTON (AP) — As former Texas tycoon R. Allen Stanford's criminal case gets ready to wind down with his sentencing Thursday for a $7 billion Ponzi scheme, the battle for control of his remaining assets around the globe still hasn't been settled.

Investors are hoping to get back some of the money that was taken from them, but those leading the efforts are at odds over who should control Stanford's frozen bank accounts and properties. They've even duplicated efforts to go after certain assets.

The legal battle over the assets has frustrated investors, who are still waiting for a payout more than three years after Stanford's businesses were shut down.

"There are people who have died while waiting for a distribution of the assets, people whose families have been left with nothing, people basically living on donations," said Luis Lopez Duran, a Venezuelan attorney who lost money in the scheme.

Prosecutors say Stanford used the money from investors who bought certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua to fund a string of failed businesses, bribe regulators and pay for his lavish lifestyle. Stanford was convicted in March on 13 of 14 fraud-related counts and could spend the rest of his life behind bars.

Stanford's financial empire once spanned from the U.S. to Latin America and the Caribbean. An Antiguan court and a U.S. judge in Dallas have both appointed people to try to recover assets. The U.S. Justice Department is also undertaking its own effort.

Ralph Janvey is the receiver appointed by a federal judge in Dallas. Since 2009, he has worked to close Stanford's various companies and sell his assets, having so far collected more than $220 million.
But Janvey has also racked up more than $108 million in fees and expenses, leaving just $112 million for investors.

Kevin Sadler, an attorney for Janvey, defended these costs, saying Stanford's empire "collapsed, it left a huge mess that has required a huge (and expensive) clean up."

Meanwhile, an Antiguan court appointed liquidators who say they have recovered or could potentially recover more than $323 million in assets for investors. But about $212 million is tied up in land once owned by Stanford that has yet to be sold.

Edward Davis Jr., one of the attorneys for the liquidators, said their process is cheaper, faster and better than the Janvey-run receivership, which he said is inefficient and too expensive.

"We are trying our very utmost to gather up assets and make claims to put money in (investors') pockets," Davis said.

The liquidators are also battling the U.S. Justice Department for control of about $330 million in frozen Stanford bank accounts in Canada, Switzerland and the United Kingdom.

In a May 3 letter, the liquidators asked the Justice Department to withdraw its claim. Davis said the liquidators are worried a large portion of these funds would not go to investors but instead be used to pay for U.S. receivership costs and claims by the Internal Revenue Service against Stanford.

In a June 4 response, Frederick Reynolds, a deputy chief with the Justice Department, suggested U.S. officials as well as Janvey and the liquidators meet to try to settle their differences.

"Continued litigation among the parties will only ensure that the total amount of money available for distribution to Stanford victims will be depleted by costs and fees incurred by the Receiver and the Joint Liquidators," he wrote.

The liquidators have said such a meeting would do no good. The Justice Department has since said if it gets control of the $330 million, it will use the Janvey-run receivership to distribute those funds to victims.

Investors, meanwhile, are divided over who should be in charge.

Richard Watson, a British citizen who lives in Antigua and lost much of his life savings, believes the liquidators should handle everything.

"Our worry is that those funds will find their way to the DOJ, from the DOJ they will go to the U.S. receiver and they will be squandered in attorney's fees. And the creditors won't see one cent," he said.

Regardless, whatever is ultimately recovered will be only a fraction of what investors lost. More could be recouped through lawsuits, but that could take years.
Investors have until Sept. 1 to make a claim with the U.S. receivership. The liquidators do not have a deadline.

RECEIVER’S SECOND INTERIM REPORT REGARDING STATUS OF RECEIVERSHIP

Receivers Second Interim Report Regading Status of Receivership

Stanford Ponzi Scheme Investors Fight for Assets

Two years after the Securities and Exchange Commission (SEC) accused the Stanford Financial Group of running a $7 billion global Ponzi scheme, only about $188 million has been recovered for investors—or about two-and-a-half cents on the dollar—according to a new report by the attorneys who are rounding up the assets.

The report, filed in federal court on behalf of court-appointed receiver Ralph Janvey, identifies hundreds of millions of dollars more in pending claims, but still not nearly enough to make Stanford's 28,000 investors whole.

What's more, the report notes, "the amount that the Receiver is ultimately able to collect from the defendants is uncertain and in all probability will be less than the amount claimed."

The SEC sued Stanford and its multi-billionaire founder R. Allen Stanford on February 16, 2009, alleging a massive fraud involving bogus certificates of deposit sold by Stanford's offshore bank in Antigua. A federal judge in Dallas froze all Stanford's assets, as well as the savings of thousands of Stanford investors, and appointed Janvey of the Dallas law firm Krage & Janvey as receiver.


The Justice Department followed in June of that year with criminal charges against Stanford, several former executives and an Antiguan regulator. The criminal cases are effectively on hold after a judge in Houston ruled Stanford is currently not competent to stand trial.

In the meantime, the asset recovery process continues, and Janvey's report suggests it is going slowly. The largest source of cash, more than $30 million, has come from the liquidation of Stanford's private equity investments. Another $6 million has come from the sale of real estate, and $5 million has come from the sale of Stanford's yachts and airplanes.

The report notes that Janvey has filed another $595 million in claims against various defendants, but does not express much optimism that that amount of money will be recovered.

"Asset recovery litigation is difficult, protracted and expensive," the report says. Besides, some of those claims are against Stanford investors themselves.

Janvey is pursuing some $211 million in "clawback" claims from investors who withdrew more from their Stanford accounts than they invested. In addition, he has sued more than 300 former employees seeking the return of their bonuses and CD proceeds.

Other claims highlight Stanford's major presence in the worlds of politics and sports.

Janvey is demanding the return of $1.6 million in political contributions that Stanford made to the Democratic and Republican Senate and Congressional campaign committees. The committees have moved to dismiss the case on procedural grounds, and the report notes that thus far, only $111,700 in political contributions have been returned.

Janvey is also demanding the return of $5 million in fees paid to prominent Texas lobbyist Ben Barnes. Barnes and his firm have moved to dismiss the case, arguing that Stanford appeared to be legitimate at the time Barnes did business with him.

IMG has not yet responded to the suit. Janvey is seeking another $12.9 million in a separate suit filed last week against the PGA Tour, which, so far, has not responded. Yet another suit, filed last month, seeks $1.3 million from the NBA's Miami Heat, which has yet to file a response.

Wednesday's two-year anniversary is the deadline for civil claims in the case under the statute of limitations, and sources expect a flurry of claims and counterclaims in the coming days.

Stanford Group Advisers' Assets to Remain Frozen

Source:CourtHouseNews.com

NEW ORLEANS (CN) - The 5th Circuit refused to thaw the assets of financial advisors and Stanford Group employees who are on trial over their roles in an alleged $8 billion Ponzi scheme.

"The assets that the receiver requests stay frozen are assets that are directly traceable to the Stanford Ponzi scheme and are the subject of this dispute," Judge Edward Prado wrote for the federal appeals panel. "The receiver merely asks that those assets continue to be held immovable while his case proceeds to judgment. We do not find that the district court erred in determining that a preliminary injunction was appropriate to protect against monetary asset dissipation."

The Securities and Exchange Commission sued Stanford Group, along with various other Stanford corporate entities including Stanford International Bank (SIB), in February 2009 for allegedly perpetrating the Ponzi scheme. Two months later, the SEC filed suit again against 66 Stanford "financial advisers."

The district court appointed Robert Janvey as receiver to marshal the Stanford estate, and the 5th Circuit ordered the lower court to thaw the frozen accounts of Stanford investors.
Janvey then obtained a preliminary injunction to continue a freeze on the accounts of numerous former financial advisors and Stanford Group employees pending the outcome of the trial.

The employee defendants asked the 5th Circuit to lift the injunction, which they say should not have been ordered while a motion to compel arbitration was pending. They also claimed the district court abused its discretion in granting the preliminary injunction, that the preliminary injunction was overbroad, that the injunction was really an improper writ of attachment, and that the receiver's claims are subject to arbitration.

The 5th Circuit affirmed the lower court's decision on all issues.
"The receiver is in an unenviable position: although the Stanford estate has many thousands of claimants, there are startlingly few assets to disperse to the Stanford victims," Prado wrote.

The three-judge panel found that the district court had the authority to grant an injunction before deciding the motion to compel arbitration, that it did not "overreach," and that Janvey had enough cause to secure a preliminary injunction." The district court did not err when it found, for the purposes of this preliminary injunction proceeding, that Stanford operated as a Ponzi scheme," Prado wrote.

The SEC claims that the Stanford Group committed the fraud for almost 15 years by selling certificates of deposit (CDs) issued by SIB, promising above-market returns and falsely assuring investors that the CDs were backed by safe, liquid investments.

At the time the SEC filed suit, Stanford should have held assets of greater than $7 billion, but actually held assets of less than $1 billion.

Though SIB claimed that it consistently earned high returns on its investments, the bank could not cover its liabilities and used new CD sales to make interest and redemption payments on pre-existing CDs.

The injunction is a necessary step for Janvey to recoup assets of the alleged Ponzi scheme, the ruling states. Prado added that the lower court was correct to group all of the transactions rather than examining evidence of claims against individuals.

"The receiver's evidence is a spreadsheet ... that lists each former employee, the form of compensation (loan, commission, or quarterly bonus), and the amount that Stanford paid each employee," the ruling states (parentheses in original). "Stanford paid the employee defendants from the alleged Ponzi scheme for the purposes of the preliminary injunction proceeding."

Since Stanford was "grossly undercapitalized" when it entered receivership, Prado added that the interests of the receiver and creditors to achieve some sort of recovery outweigh those of the employee defendants

U.S. judge OKs sale of Stanford's Panama assets

The receiver overseeing accused swindler Allen Stanford's estate may proceed with the sale of the firm's bank and brokerage in Panama, a U.S. judge said on Wednesday.

Ralph Janvey, the court-appointed receiver, may proceed with the sale of Stanford Bank S.A. and Stanford Casa de Valores in Panama City, two assets held by Stanford International Holdings S.A., U.S. District Judge David Godbey said in a one-page order.

Panama's bank regulator seized Stanford's Panama operations last year after the U.S. Securities and Exchange Commission accused Texas billionaire Allen Stanford of running a $7 billion Ponzi scheme.

Janvey had previously negotiated the sale of the Stanford assets to Strategic Investments Group for $15.5 million, according to court documents.

Stanford, 59, opposed the sale. He has denied any wrongdoing and is in a Houston jail awaiting trial on criminal charges related to the fraud.

Vantis Suffering Major Cashflow Problems

Vantis is reported to be suffering major cashflow problems because liquidators stand their own costs unless and until funds are available to pay them.

In the case of SIB, there are substantial funds - Vantis say that they have identified more than USD100 million in the UK. But the assets are frozen after the UK's Serious Fraud Office, with support from the US Department of Justice obtained an order to secure the funds. Vantis applied for an order in England that the assets should be controlled from Antigua and Barbuda and that that jurisdiction is the "Centre of Main Interest" and that they, therefore, fall within the scope of Vantis' instructions. But the receiver in the USA appealed.

The Court has not yet ruled, perhaps having in mind the case of European Bank in the Cayman Islands where regulators appointed liquidators who wound up the bank whilst criminal proceedings were proceeding; the criminal proceedings were thrown out but by then the bank was dead. The liquidation paid all creditors in full together with substantial liquidation costs leaving shareholders without a bank and out of pocket.

The only reason that SIB is in the hands of liquidators is because the US authorities accused Allen Stanford of fraud; he has not been tried.

SIB assets in Switzerland are also frozen and the liquidators have also applied for those to be released, again with no favourable response.

The reports as to Vantis' financial state were reported The Times today citing a note in Vantis' accountants' report. The new (Non-Executive) Chairman of Vantis, since mid December, has been Mike Wheeler, formerly Global Managing Partner of Advisory Services at KPMG. There have been a number of board changes. KPMG are the auditors for Vantis.

They have qualified the accounts with a startlingly clear statement: there are "material uncertainties associated with receipts from the Stanford insolvency. [The Stanford uncertainties] may cast significant doubt on the company’s ability to continue as a going concern” Vantis restructured its borrowings last year, rescheduled a bond payment and arranged a modification of its banking covenants to something "more appropriate." But KPMG are not convinced that this will work: “the validity of the going concern basis depends on the group being able to operate within its current banking facilities and covenants which requires the successful outcome of the above”.

In short, while the assets remain frozen and not available to the liquidators to pay themselves, the liquidators face collapse.

In the UK, liquidators are subject to remarkably little supervision with regard to their activities and fees and those estates that do have funds are often subjected to very substantial charges in order to make up for the cases where there is a loss as the insolvency practitioners view their practice as a whole rather than in individual cases. There is fierce competition amongst firms to secure cases where there are assets against which charges may be raised

Senators Introduce Stanford Investment Fraud Resolution

Antigua government taken over more than 250 acres of Standford's property

U.S. Senator Richard Shelby (R-AL), ranking Republican on the Committee on Banking, Housing and Urban Affairs, along with Senators Vitter (R-LA), Hutchison (R-TX), Cochran (R-MS), Cornyn (R-TX), Isakson (R-GA), Wicker (R-MS), and Shaheen (D-NH), introduced a resolution expressing the sense of the Senate that the Secretary of the Treasury should direct the United States Executive Directors to the International Monetary Fund and the World Bank to use the voice and vote of the United States to oppose making any loans to the Government of Antigua and Barbuda until that Government cooperates with the United States and compensates the victims of the Stanford Financial Group fraud.
Allen Stanford is known to have had close ties with the Government of Antigua and Barbuda, and is alleged, among other things, to have loaned that government at least $85,000,000, which presumably came from Stanford investor funds. The Government of Antigua and Barbuda is refusing to cooperate with the U.S. receiver in charge of gathering the assets of the Stanford Financial Group and distributing them to victims of the fraud. Despite this lack of cooperation in providing recourse to investors in the Stanford Financial Group, the Government of Antigua and Barbuda is currently seeking loans from the IMF and World Bank, both of which receive significant funding from the United States Government.

“The Ponzi scheme perpetrated by Allen Stanford cheated thousands of people, many of them in the United States, out of their investments,” Shelby said. “It is essential that to the extent possible these victims get their money back. It is absurd that the Government of Antigua and Barbuda is standing in the way of helping victims, while also holding out its hand for funding. This resolution makes clear that the United States will not accept such behavior.”

“It’s unbelievable that a government so intertwined in the allegations against Mr. Stanford has the audacity to ask for money from the IMF and World Bank. Not only was one of Antigua’s regulators allegedly a part of Mr. Stanford’s ponzi scheme, but the Antiguan government has taken over more than 250 acres of Stanford’s property and they have refused to work with the US court appointed receiver. Antigua shouldn’t see a dime of money from the US, IMF or World Bank until the victims of this fraud have first been helped,” said Vitter.

"I urge the U.S. Treasury Secretary to work with the International Monetary Fund to seek cooperation from Antigua and Barbuda in order to compensate the victims of the Stanford Financial Group fraud," Senator Kay Bailey Hutchison said.

“Instead of stonewalling efforts to recover assets linked to the scam perpetrated by Allen Stanford and his firm, the government of Antigua and Barbuda should join U.S. and international organizations in trying to find some measure of justice for victims. Government officials in Antigua and Barbuda must understand that their lack of cooperation is unacceptable,” said U.S. Senator Thad Cochran.

“Allen Stanford’s investment schemes devastated countless Texans. The IMF should not loan money to Antigua unless Antigua agrees to cooperate in reimbursing these innocent investors to the fullest extent possible,” said Senator Cornyn.

“Allen Stanford bilked billions of dollars from innocent Americans through his ponzi scheme, and the laws of Antigua shielded the Stanford Financial Group while it operated,” said Senator Isakson. “As long as the Government of Antigua and Barbuda holds assets of Stanford that are not available to the U.S. receiver, it should not receive any funding from the U.S. or the IMF and World Bank. The injured American families deserve no less.”

“Thousands of people have been victimized by the Stanford Ponzi scheme, including many who lost their life savings,” Wicker said. “The cooperation of the Antigua government is essential to helping the victims of this fraud, but this assistance has been consistently denied. It is completely unacceptable for Antigua to receive any loan from the IMF and the World Bank, both of which receive significant funding from U.S. taxpayers. The American government needs to let it be known that this lack of cooperation is not acceptable. This resolution will send that message.”

Recovered funds to go to Stanford investors

Hundreds of millions of dollars belonging to residents of Louisiana and other states are leaving court control and headed to their owners, people associated with the Stanford fraud debacle said Wednesday.
What’s being returned at this point, however, is just a fraction of the more than $7.2 billion alleged to have been looted by Texas promoter Robert Allen Stanford and some of his associates.
“This was almost like somebody who had a guillotine hanging over their head,” said Phillip W. Preis, a Baton Rouge attorney for several people retrieving their money. “It was like someone had given them a reprieve from a death penalty.”
Stanford, 59, is under indictment and in federal custody in Houston, accused of orchestrating frauds against nearly 30,000 investors.
Preis estimates that as much as $1 billion of that loss was suffered by approximately 1,000 residents of the Baton Rouge, Lafayette and Covington areas.
Dallas lawyer Ralph S. Janvey, the court-appointed receiver responsible for locating and seizing Stanford assets, froze about $894 million in funds remaining in approximately 600 investor accounts after Stanford’s operations were shut down in February.
Janvey had planned to distribute that money on a pro rata basis to about 4,000 bilked investors in this country and another 25,000 in other nations.
But the Securities and Exchange Commission, which had recommended Janvey’s appointment, argued there is no legal basis to seize funds from innocent investors who did not know their money had been poured into a fraudulent scheme.
And a three-judge panel of the 5th U.S. Circuit Court of Appeals ruled Friday in New Orleans that the SEC’s position was correct.
The 5th Circuit ordered Janvey to return the investor funds.
Janvey could have appealed the decision to the entire 5th Circuit or the U.S. Supreme Court.
But he posted a notice on his Web site Tuesday that “investor accounts previously subject to the freeze order are now available for release.”
The one exception, Janvey notes, covers funds frozen in the accounts of former Stanford brokers and employees. The receiver’s claim on that money continues, he says in his Internet posting.
Retirees and other investors had waited since February to retrieve their remaining money, but Preis said many were more stunned than celebrative this week.

“There was no joy,” Preis said. “Just relief.”

Some investors with Stanford lost everything, while other investors have varying amounts of money that remain in certain Stanford accounts.

Central resident Debbie Dougherty and her husband, Ken, had more than $500,000 at stake in the dispute with Janvey.

Dougherty said she and her husband filed for return of that money on Monday and are hoping that it will arrive this week.

Preis said the process may take slightly longer, between five and seven business days.

For investors who lost all of their savings to Stanford’s companies, the 5th Circuit’s decision was devastating.

Blaine Smith, of Baton Rouge, lost $1.5 million. He said Janvey’s plan, while painful to those who did not lose all of their investments, would have provided some money to all innocent investors.

The 5th Circuit judges “just did the same damn thing that Allen Stanford did,” Smith said. “They took money from us and gave it to others.”

Smith said he now will lend support to efforts by Louisiana’s congressional delegation to have the SEC order the broker-funded Securities Investor Protection Corp. to provide up to $500,000 for each defrauded Stanford investor. SIPC already has provided $534 million for victims of convicted New York investment promoter Bernard L. Madoff.

As for his fellow Stanford investors who now recover some or all of their money from Janvey, Smith said he bears no grudges.

“I’m glad for them,” Smith said. “At the same time, it just kills us.”

Vantis Report to Stanford's Investors

2 November 2009


Dear Sir/Madam

Stanford International Bank Limited -in Liquidation (the Bank)(SIB)

This report will be emailed to those investors who have registered on the Online claims Management System. We will not be sending this report out via the postal service, as we have found the service to be unreliable in many of the countries where investors are located and this Is compounded by the costs involved. We therefore believe that email is the most effective way to communicate wi investors. For ease of reference, a copy of this report has also been posted on our website www.vantisplc.com/Stanford

Current Position with Investor Claims and Enquiries

Investors can now register their claims on the Online Claims Management System, which can be accessed via the following link: www.vantisplc.com/Stanford. Investors who have registered on the Online Claims Management System will be able to print a statement of their account, change their address details, and formally agree their claim, or notify us of any discrepancies.

For investors who do not have access to a computer, or do not wish to register online, it will remain possible for them to submit their claims In writing directly to the Joint Liquidators via the headquarters of SIB in Antigua. We shall also advertise details of how investors can register their claims in due course through national publications in the various jurisdictions where investors reside.

We continue to deal with email enquiries, responding to investor queries both in English and Spanish.

Recognition Proceedings

United Kingdom (UK)

Assets of circa US 100 million have been located in the UK. To gain control of these assets, the Joint Liquidators sought formal recognition of our appointment. On 3 July 2009, the High Court of Justice of England & ales Issued a judgment in favour of the liquidators that the Centre Of Main Interest (COMI) of SIB is Antigua and Barbuda. This judgment has been appealed to the Court Of Appeal in the UK by Ralph Janvey, the United States (US) Receiver appointed by the Securities and Exchange Commission (SEC). The appeal hearing has been set for the 17 November 2009. As such, until the appeal is concluded, the funds in question are frozen and not available to either the Joint liquidators or Mr Janvey.

Canada

The Canadian Court did not consider our application for recognition under COMI, but issued a judgment recognising the US Receiver as the party to whom the assets located in Canada (approx. US$20 million) should pass.We have taken steps to appeal the Court's decision to not hear our COMI argument. Given the existence of further proceedings involving the Attorney General in Ontario, Canada, the funds in Canada remain frozen.

Switzerland

The decision recognition Switzerland is with the Swiss authorities and we await their decision, which we anticipate receiving within the next two months. Detailed submissions have been made to the Swiss Financial Market Supervisory Authority, as to why COMI should be granted to the Joint Liquidators.

United States (US)

Proceedings have been issued under Chapter 15 of the US bankruptcy code. As SIB is not the subject of insolvency proceedings in the US, we are seeking the recognition by the US Court of the Antiguan proceedings. Unfortunately, the US Court has not yet considered our application and,at the current time, is not able to forecast a hearing date.

US Receiver's Appeal Against the Decision of the High Court of Antigua & Barbuda

On 15 April 2009, the US Receiver made an application to the Eastern Caribbean Appeal Court of Antigua & Barbuda to appeal the decision to place SIB into liquidation and this matter remains outstanding.

US Receiver Co-operation

We, together with our attorneys, have sought to reach a co-operation agreement with the US Receiver and we set out these matters in detail in our last report. To date, no indication of co-operation has been received.

Antiguan & Barbudan land Assets

The land assets of SIB are still the subject of discussion with the Government of Antigua who took a protective step to preserve these assets. The land assets have a significant value, but will inevitably take a considerable time to realise.

Dividend Prospects for Creditors

As all the COMI recognition proceedings have either not been adjudicated upon or the decision is subject to appeal and other assets, being land with an anticipated long term realisation period, we are at present unable to estimate the level and timing of a distribution to creditors.

Other Matters

We continue with our investigations into the failure of the Bank and the alleged fraudulent manner in which its executive directors acted. You may be aware that a number of the former directors of the Bank have been charged in the US with offences relating to the fraud perpetrated upon the Bank.