SEC Sanctions Former Staffer Accused of Thwarting Stanford Probe

By: Scott Cohn Senior Correspondent, CNBC
 

A former regional enforcement director with the Securities and Exchange Commission who allegedly derailed repeated attempts to investigate convicted Ponzi schemer Allen Stanford and then tried to represent Stanford in private practice has been barred from practicing before the Commission for one year, the SEC said.

Spencer Barasch, 54, a partner at Andrews Kurth, previously agreed to pay a $50,000 civil penalty to the Justice Department to settle allegations he violated federal conflict of interest laws.

 Barasch was a top enforcement attorney in the SEC’s Fort Worth office beginning in 1998, around the time the office began receiving complaints about Stanford. An internal investigation found Barasch repeatedly rebuffed other staffers’ requests to investigate Stanford. After Barasch left the Commission in 2005 for private practice, he asked the SEC’s ethics office for permission to represent Stanford and was told he could not. But in 2006, Barasch began representing Stanford anyway, even asking his former colleagues for information about the investigation they had finally begun.

The SEC sued Stanford for fraud in 2009, and a federal grand jury indicted him later that year for running a $7 billion Ponzi scheme. He was convicted on 13 criminal counts in March and is awaiting sentencing.

Asked by then-SEC Inspector General why he was so persistent in attempting to represent Stanford, Spencer Barasch reportedly replied, “Every lawyer in Texas and beyond is going to get rich over this case. Okay? And I hated being on the sidelines.”

The SEC says Barasch has agreed to the one-year bar “without admitting or denying the Commission’s allegations.”

“This action shows that the Commission takes seriously ethical lapses by attorneys who appear and practice before it, and that such violations will result in serious disciplinary action,” SEC Associate General Counsel Richard Humes said in a statement.

Stanford's Lawyers Subpoena Attorney of Key Witness

Friday, 10 Feb 2012 By: Scott Cohn Senior Correspondent, CNBC

In an unusual move, attorneys for accused Ponzi mastermind Allen Stanford have issued a subpoena to compel the attorney for the prosecution's star witness to testify, CNBC has learned.

David Finn, the attorney for former Chief Financial Officer James Davis, tells CNBC that United States Marshalls served the subpoena at his office Friday.

Davis, who was also Stanford's college roommate, wrapped up roughly four days of testimony earlier this week, in which he implicated his former boss in the alleged $7 billion scheme.

Davis pleaded guilty in 2009 to three felony counts. Defense attorneys allege his testimony was fabricated in hopes of receiving a lighter sentence.

Stanford, 61, is on trial in Houston on 14 counts. Prosecutors could rest their case as soon as today - day 15 of the trial.

That means Finn could be on the witness stand as early as Monday, although defense attorneys have been careful not to tip their hand about their strategy.

Calling the attorney for the main witness against their client is not only an unusual move, it could be risky for the Stanford defense team. While they apparently hope to attack the plea agreement Finn arranged for Davis, Finn also could be privy to information that damages Stanford in the eyes of the jury.

The defense has also indicated it plans to call Stanford himself to testify
- a strategy that, if they follow through with it, could involve even bigger risks

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Stanford claims 'defied imagination'

Fri, February 10, 2012
HOUSTON, Texas, CMC - An Antiguan regulator who scrutinized disgraced Texas tycoon R. Allen Stanford's bank in the months preceding its collapse said on Thursday he was in disbelief about the profits it claimed.

"It defied my imagination that the bank could make a billion dollar profit,"
Paul Ashe of Antigua's Financial Services Regulatory Commission told jurors in Stanford's criminal trial in US federal district court here, alluding to profits Stanford's Antigua-based Stanford International Bank (SIB) claimed in light of the 2008 international financial crisis.

Ashe also said there was panic among tens of thousands of depositors after the US financial services regulator, the Securities and Exchange Commission (SEC), froze Stanford's assets, in February 2009, over the alleged "massive
US$7 billion Ponzi scheme involving high-yield certificates of deposit at the SIB.

"It was total chaos," he testified. "The customers were screaming for their money."

Ashe said he and a team of regulators were surprised by the lack of documentation to support Stanford's reported finances at the SIB.

He also said the team was deeply concerned about loans that Stanford received from the SIB, which, he claimed, were not supported by cash reserves necessary under Antigua laws.

"We wanted to see how Stanford International Bank was actually making its money," Ashe said.

US prosecutors have charged that Stanford used depositors' money to operate his businesses, pay for his lavish lifestyle, and bribe regulators and auditors.

They also charged that Stanford lied to depositors by telling them their money was being safely invested.

Stanford has repeatedly denied any wrongdoing. He has been charged with 14 counts, including mail and wire fraud, in the criminal case. He faces up to 20 years in prison if convicted.

Stanford's former finance chief, James Davis, has pleaded guilty to three felony counts and testified, for five days on the stand, as a government witness against his ex-boss.

Davis claimed that Stanford was the architect and mastermind behind the alleged "massive" Ponzi scheme.

He also told the court that Stanford was the chief beneficiary of the alleged scheme.

In a separate indictment, to be tried later, former head of the Antigua Financial Services Regulatory Commission, Leroy King, is also charged in the alleged Ponzi scheme, along with three Stanford financial officials.

Prosecutors allege that King alerted SIB officials when the SEC began making inquiries in 2005, and that Stanford's general counsel drafted King's response stating that the bank was in compliance with regulations.

Witnesses have testified that, besides cash payments, King received tickets to the 2004 and 2006 Super Bowls of the American National Football League.

Ashe, who served with King for part of King's tenure, said he was unaware of those payments, adding that Antigua laws prohibit regulators from accepting gifts worth more than $50.

Stanford attorneys file another motion to delay trial

Stanford's attorneys are still pushing for delay, the judge should impose some sort of fine on them for wasting his and the courts time. The excuse this time is that a "non-attorney member of the defense team will not be available on that date"!! Can you believe it? They have had this date from Hitner for over 1 year and they have the nerve to say they will not be available!! How stupid and incompetent are these guys???

HOUSTON, United States, Monday January 16, 2012

The court-appointed attorneys for accused Ponzi schemer Allen Stanford have filed a new motion to delay the January 23 start of trial after being ordered to remain on the job.

They have asked for a continuance on the basis that a non-attorney member of the defense team will not be available on that date.

U.S. District Judge David Hittner said that request could be argued this week at a pre-trial hearing.

The judge previously denied a request by Stanford’s attorneys for the trial date to be delayed by three months.

Last Friday, the judge ordered Stanford’s four attorneys, among them Ali Fazel and Robert Scardino, to continue preparing for the trial after they submitted a withdrawal request two weeks ahead of jury selection. The attorneys said budget restrictions were hampering their effectiveness.

The judge, in a two-page order said, “The defense team’s primary reason for seeking such relief is based upon its self-proclamation that Stanford’s right to effective assistance of counsel will be impaired.

“The court notes that the defense team maintains this position despite the fact that two of its lawyers - Scardino and Fazel - have been appointed to this case since November 2010, and the other two lawyers - Parras and McGuire - have been appointed to this case since March 2011,” Judge Hittner added.

He also denied motions by the defense to throw out the case on constitutional grounds.

The 61-year-old Stanford was indicted in June 2009 on charges of defrauding investors through his Antigua-based Stanford International Bank Ltd. The former Texas financier has denied all wrongdoing.

Allen Stanford’s Lawyers Can’t Quit His Case, Judge Says

By Laurel Brubaker Calkins and Andrew Harris

Jan. 13 (Bloomberg) -- R. Allen Stanford’s attorneys must defend him at a $7 billion investment fraud trial that will begin Jan. 23 in Houston federal court, said a U.S. judge who rejected the lawyers’ bid to quit.

Stanford’s court-appointed attorneys, Ali Fazel, Robert Scardino, John Parras and Ken McGuire, asked to exit his case in a motion filed on Jan. 11, less than two weeks before the start of jury selection. They claimed they hadn’t been given enough time or resources to prepare an adequate defense against what they describe as a complicated financial fraud case.

“The defense team’s primary reason for seeking such relief is based upon its self-proclamation that Stanford’s right to effective assistance of counsel will be impaired,” Hittner said in a two-page order that also rejected the lawyer’s bid for a three-month delay in starting the trial.

“The court notes that the defense team maintains this position despite the fact that two of its lawyers -- Scardino and Fazel -- have been appointed to this case since November 2010, and the other two lawyers -- Parras and McGuire -- have been appointed to this case since March 2011,” Hittner said.

Stanford, 61, has been imprisoned as a flight risk since he was indicted in June 2009 on charges of defrauding investors through allegedly bogus certificates of deposit at his Antigua- based Stanford International Bank Ltd. Stanford denies all wrongdoing.

Pretrial Hearing

Hittner said in a separate order late today that Stanford’s lawyers could argue yet another delay request, which they filed under seal this afternoon, at a pretrial hearing next week.

The lawyers seek “a continuance on the basis that a non- attorney member of the defense team will be unavailable to assist at the commencement of trial,” Hittner said in the ruling. He ordered the government and Stanford’s lawyers to continue “full trial preparation” in the meantime.

The former financier was declared indigent and given a taxpayer-financed defense because all of his assets were frozen by court order after the U.S. Securities and Exchange Commission sued him in February 2009.

Fazel and Scardino have complained about time and funding restrictions imposed on the defense team by Hittner and the U.S. Court of Appeals in New Orleans, which approves trial budgets for court-appointed attorneys.

Prison Attack

They said Stanford has had too little time since he was declared mentally competent on Dec. 22 to adequately review the thousands of documents necessary to assist in his defense. Stanford spent almost nine months in a prison rehabilitation program recovering from a head injury suffered during a 2009 prison attack and an addiction to anxiety drugs prescribed following the assault.

Fazel said in court filings that the defense team was also hampered by the yearend resignation of all its document- management and trial-preparation contractors over unpaid bills dating back to September. The contractors returned to work in early January after an appellate court granted them partial back pay and ordered them to continue working.

Lead prosecutor Gregg Costa opposed delaying the trial by more than a few weeks, citing efforts by Stanford’s defense team to get Stanford bail and to fight his competency declaration. Stanford’s attorneys have also filed multiple constitutional challenges in his case, none of which have succeeded.

Certain Issues

“The defense obviously has devoted extraordinary resources to certain issues,” Costa said in a filing earlier today. “It is time for the defense to devote those resources to the trial.”

Laura Sweeney, a Justice Department spokeswoman, declined to comment on the judge’s rulings today.

“We’re preparing for trial,” Fazel said in a telephone interview after Hittner denied him permission to quit. He declined to comment further, citing a gag order banning lawyers from publicly discussing the case.

The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09cv298, U.S. District Court, Northern District of Texas (Dallas).

--Editors: Mary Romano, Peter Blumberg

Stanford Defense Experts Paid, Told to Keep Preparing for Trial

By Laurel Brubaker Calkins (Bloomberg)

R. Allen Stanford’s defense experts were ordered to keep preparing for the former financier’s trial over an alleged $7 billion investment fraud by a U.S. appellate court that also agreed to pay their back wages.

All of Stanford’s non-attorney experts quit last week after appellate judges controlling the former billionaire’s taxpayer- funded defense budget said they would limit and withhold the experts’ compensation until after conclusion of his trial, set to begin Jan. 23 in Houston federal court.

“It would be neither feasible nor economical to obtain a replacement to perform the services Marcum was expected by counsel to provide,” Circuit Judge Edith Jones, the chief of the U.S. Court of Appeals in New Orleans, said in a letter yesterday to Marcum LLP, one of the expert contractors that resigned last week from Stanford’s defense team.

The service providers were also “ordered to continue work on the case as previously planned, including the provision of testifying experts, through the end of trial, and, if required by counsel, through the conclusion of the case in the district court,” Jones said in the letter, which was posted to the court’s electronic docket.

Jones issued similar orders and agreements to pay overdue invoices to two other expert-services contractors to keep them working on Stanford’s defense. Accumyn Consulting and the Worley Group had also resigned last week over non-payment of bills dating back to September, according to court filings.

Preparation Time

Ali Fazel, Stanford’s lead criminal-defense attorney, asked U.S. District Judge David Hittner last week to delay Stanford’s trial for three months to allow more preparation time. Fazel argued that Stanford has had too little time since being declared mentally competent to adequately review documents critical to his defense.

Fazel said the defense was hampered by the resignation of all expert-services contractors on Dec. 30, after the appellate court balked at paying their bills. Jones, in her letters yesterday, said billings by Marcum and Accumyn feature “hourly rates significantly in excess of the rates payable under the Criminal Justice Act to even the most experienced attorneys.”

Jones said the court would “consider” future payments for work by Accumyn and Marcum according to a sliding schedule pegged to the beginning and end of Stanford’s criminal trial, as well as any post-trial work the firms provide. Jones didn’t require withholding for work she ordered the Worley Group to provide.

Flight Risk

Stanford, 61, has been in custody as a flight risk since he was indicted in June 2009 on charges of defrauding investors through allegedly bogus certificates of deposit at his Antigua- based Stanford International Bank. He denies any wrongdoing.

Stanford was declared mentally fit for trial on Dec. 22, after completing eight months of rehabilitation at the federal prison hospital in Butner, North Carolina. Hittner found the former financier had sufficiently recovered to understand the proceedings and assist with his defense after suffering head injuries in a September 2009 jailhouse assault and becoming addicted to anxiety drugs prescribed by prison doctors following the attack .

Hittner appointed taxpayer-funded defense attorneys for Stanford in 2010 after he found the former billionaire to be indigent. Stanford, who was ranked the 205th richest person in the U.S. in 2008 by Forbes magazine, is accused by the government of skimming more than $1 billion in investor funds to finance a lavish lifestyle of private jets, yachts and a Caribbean island.

The U.S. Securities and Exchange Commission seized all of Stanford’s personal and corporate assets in February 2009, when it sued him on claims he ran a “massive Ponzi scheme” built on the Antiguan bank CDs. Stanford also lost access to his corporate directors and officers liability insurance last year, after underwriters won the right to refuse coverage on the basis of a guilty plea by Stanford’s former finance chief.

“Stanford, as an indigent defendant, is entitled to a solid, capable, and competent defense, not the deluxe or ‘perfect’ defense that he might have otherwise desired were he still in control of the millions (or even billions) of dollars indicative of his past lifestyle,” Hittner said in a Dec. 28 order.

Stanford asks judge to delay trial after experts resign

By PURVA PATEL, HOUSTON CHRONICLE

Expert witnesses working for R. Allen Stanford's defense have resigned because they haven't been paid, according to a request made by the former billionaire's lawyers to postpone his trial.

Last week, U.S. District Judge David Hittner rejected a previous request for a 90-day continuance in the trial of Stanford, who is accused of swindling investors out of $7 billion. The latest request asks the judge to reconsider and notes Stanford - who was only recently deemed competent to assist his attorneys - needs time to go through the evidence in the case in order to assist in his defense.

So far, all expenses submitted to the district court have been within the budget previously submitted to the court, but experts haven't been paid for four months, according to a recent motion filed by Stanford's government- appointed lawyers.

Limitations on budget

The 5th Circuit Court of Appeals has also informed the attorneys that it intends to limit the expert budget moving forward and mandate that all payments be made after the trial ends, according to the motion.

"Counsel was informed by all experts that they cannot continue to assist the defense under the new parameters. ... All experts have therefore tendered their resignations to counsel and have ceased all work relating to this matter," the motion states.

The attorneys, therefore, can't prepare for trial or meet the court's deadlines, they argue.

Robert Scardino, an attorney for Stanford, declined to comment Monday.

While the district court usually handles approval of payments for indigent defendants like Stanford, the circuit court may step in when a case's budget looks like it will exceed the allocated funds, said Philip Hilder, a Houston attorney and former federal prosecutor.

There is usually an arbitrary lag time of weeks or months before payments are made after being submitted, but in such a time-consuming case, experts aren't necessarily going to "take it on good faith that they're going to get paid," Hilder said.

Ineffective counsel?

"The defense is in a difficult position because this particular case is expensive and yet they have a duty and obligation to zealously defend Mr. Stanford," Hilder said. "Unless the defense can properly and adequately utilize expert testimony, Mr. Stanford may have a claim for ineffective counsel."

Previously, Stanford's lawyers have claimed he suffered brain damage in a jailhouse attack that rendered him unable to assist in his own defense. His original trial date in January 2011 was postponed so he could undergo a series of evaluations at a federal prison hospital.

Hittner ruled last month that Stanford was competent, denied the lawyers' first request for more time to prepare for trial and ordered jury selection to begin Jan. 23.

Stanford, 61, who headed Houston-based Stanford Financial Group, maintains he is innocent of the 14 charges he faces.

He has been held without bail since his June 2009 arrest.

A federal indictment alleges Stanford and others defrauded investors who bought certificates of deposit issued by Stanford's bank in the Caribbean island nation of Antigua.

Three co-defendants are free on bail and will be tried later, and a fourth is fighting extradition from Antigua.

Stanford Group's chief financial officer was charged separately, pleaded guilty and is expected to testify if the case comes to trial.

Stanford Fallout Continues in Dallas

by BYRON HARRIS

DALLAS -- The $7 billion Ponzi scheme allegedly masterminded by Houston's Allen Stanford has a Dallas component.

The receivership aspect off the proceeding, involving all the property and its victims, is in a federal district court in Dallas.

The case is now 32-months-old. Angry lawyers and their clients gathered Thursday to find out the status of the case.

John Wade, a Louisiana veterinarian, who lost his company's pension to Stanford and also represents 1500 victims in Louisiana, was at Thursday's hearing.

"I see people that have died," said Wade, describing what's happened in the months while the case has languished.

"I see people that have gone through and tried to hold onto their assets and ultimately they've lost them," he said.

Some of the issues in the Dallas case are how much money and property is at stake, its location and who should have a voice in the matter.

Many of Stanford's investors were from Central and South America. His company was headquartered on the island of Antigua, which wants a prominent voice in the case.

Meanwhile lawyers administering the proceedings have already charged tens of millions of dollars in fees, while victims have received nothing.

"We're looking at recovery of maybe 10 or 15 cents on the dollar in liquidation of assets which for some of these people is not nearly enough," said Ed Snyder, attorney representing victims.

The criminal trial of Allen Stanford was supposed to happen January 2011. It has been delayed until January 2012, while his mental competency is evaluated. Lawyers told the Dallas courtroom it may well be delayed again.

Former Texas billionaire R. Allen Stanford remains in a Houston prison. Stanford is accused of putting the money in fake certificates of deposit.

SLUSA Ruling Re SIB CDs

I have posted below the recent ruling by Judge Godbey that the Stanford class action lawsuit against the sate of Louisiana is barred by the Securities Litigation Uniform Standards Act of 1998 [SLUSA]. His ruling is so broadly written that it is likely it may be used to terminate most of the other Stanford US class action lawsuits. No doubt there will be a vigorous appeal as the US attorneys who have filed all these lawsuits stand to gain hundreds of millions of dollars in contingency fees.

As more than two years have now passed since the demise of Stanford Financial Group it begs the obvious question why all these attorneys did not consider this scenario before collecting vast sums in retainers from the Stanford Victims.

For any Stanford victim who may not be entirely satisfied with their choice of attorney, in case you are not already aware, you also have a choice, and that is to take your representation elsewhere. All you need do is to request your attorney transfer your file, and your retainer, to any other attorney of your choice. The choice is yours.

Slusa Ruling Re Sib Cds

Statement by Kachroo Legal Services

"Kachroo Legal Services, P.C. wishes to inform Stanford investors that despite slanderous representations it will not file amended claims for any Stanford investors unnecessarily and it is not our intention to do so, nor has it ever been. KLS is attempting to extend an offer to review your claim and if it is found to be lacking to amend it to participate in any potential class action we file. The review would be done free of charge. Note also that unlike the 30 percent contingency of other attorneys, KLS is charging a small up front stipend and only a 15 percent contingency fee upon recovery."


Please contact us IMMEDIATELY to review your claim so that you are included in the class action at wlugo@kachroolegal.com or by calling 617-864-0755.

OPEN LETTER TO STANFORD INVESTORS REGARDING FTCA CLAIMS AGAINST THE UNITED STATES SECURITIES AND EXCHANGE COMISSION

Dear Stanford Investors,

There have been some very critical accusations from some of the Stanford investor groups; some of their attorneys; and even the Stanford investors committee; relating to the Stanford FTCA claims, some of which are clearly intended to discredit the investors behind this effort to inform and encourage you to preserve your rights to claim against the SEC, by filing an administrative claim.

As one of the instigators of this course of action, I think it is time that some of the false and misleading claims are put to rest, and suggest that searching questions be raised of the motivation of some of the individuals who are behind these accusations.

On the 15th November 2010, little more than two months ago, I wrote to the Stanford Investors Committee (SIC) and enquired if they had any intention of taking any action against the SEC, given the damning OIG report and the pending expiration of the statute of limitations. I still await a reply to that letter; however, following a later discussion with one of the attorney members of that committee, it was apparent the committee had no intention of commencing any such action to protect us.

Shortly afterwards, I got together with a small group of like-minded investors to search for a new attorney to represent us in a claim against the SEC. First there were attempts to have us gagged, which we had to overcome. Since then we have worked night and day, to bring together a workable solution that may benefit all the Stanford investors.

The number of attorneys with relevant experience of successful claims against the SEC are few. Lengthy discussions followed with Dr Gaytri Kachroo of Kachroo Legal Services (KLS), following the FTCA claims KLS had submitted for 500 Madoff investors, and we were all impressed; not just by her excellent academic achievements, but by the way she had reached the higher echelons of her chosen profession, yet managed to maintain a caring attitude; was willing to go the distance for us, and most importantly, had already represented investors in two actions against the SEC and/or the US government to successful settlement, and had very plausible arguments that we may succeed with an FTCA claim against the SEC.

Around the same time Angela Kogutt aka Angela Shaw, of the Stanford Victims Coalition (SVC) also approached Dr Kachroo, having seen the press releases relating to the Madoff victims claims. The support of the SVC was initially proffered, and Dr Kachroo was invited to address the SIC, with a view to filing protective FTCA claims for each of the Stanford investors. At that meeting, SIC attorneys all indicated they had no intention of themselves pursuing an action against the SEC because they were all involved in litigating other actions for Stanford investors. They considered Dr. Kachroo to be optimally positioned to take on this action. This created some hope that all Stanford investors could commonly join in the SEC claims process through one channel and action. Covisal, in Latin America, was also invited around this time to participate in the process.

I have no wish to dwell over all the water that has passed under the bridge since then, but our initial hopes that this action may unite all the various investor associations in a common cause were clearly misplaced.

Instead, we have been subjected to a barrage of defamatory internet attacks, mostly anonymous; including accusations of impropriety, amongst many others, all intended to discredit us. Investors who have exercised their right to join us have been threatened, and apparently some of us are now to face legal action.

I could have understood if these attempts to discredit us, and threats of legal recourse, had been at the instigation of the institution we hold responsible for our losses, but I am dismayed they are almost entirely from individuals who purport to be working in the best interests of the Stanford investors. How can they claim to be doing so by trying to silence us? What is the motivation behind these attacks, and why are they reluctant for Stanford investors to preserve their rights to any recovery?

Since we embarked on this course of action, all we have ever wished, is to make as many Stanford investors as possible aware of this possibility for recovery, and enable your to make your own educated decisions how best you may preserve your rights of recovery against the SEC, before the statute of limitations expires.

As far as the Stanford Investors Committee is concerned, I really would like to know why the preservation of all Stanford investors' interests was not encouraged by them long before, and why exactly are SIC members only now purporting to do so now, at the last moment, and then only after our attorney has agreed to take the case? If that committee really is acting in our best interests, why do they refuse to support the one attorney who truly believes in our cause? Furthermore, if we had not instigated this action, would they have simply allowed the statute of limitations to slip quietly by, and all the investor’s rights along with it?

To those investors who have decided to ‘self-file’ their own claims, I wish you well, and hope you have done your research. If you have not, and have allowed yourselves to be railroaded into an action you do not fully understand, and it all goes wrong, who will you blame; yourself, or those who persuaded you it was easy to do it yourself?

To those investors who understand the risks, yet have chosen to file with a different attorney, I wish you well too, yet I do not understand why any investor would willingly choose an attorney who is not prepared to litigate their claim.

To the investors who have joined us, and have realized the common sense of registering with KLS, I wish you the best of all. It is your willingness to participate that has created the critical mass we needed to ensure this action can now go all the way. Thank you all.

To those of you who have yet to decide what is best for yourselves, please make your decision sooner rather than later. You have less than three weeks before the statute of limitations expires, after which you will be barred forever from claiming your losses against the SEC, and if you decide to join us you are all very welcome. Here is Kachroo Legal Services email one last time: info@kachroolegal.com and if you wish to read more of the arguments and discussions, please visit http://stanfordsforgottenvictims.blogspot.com or register for our private forum, which is free of charge and open to all bona-fide Stanford investors: http://svg.creatuforo.com/profile.php?mode=register


Lest anyone else allege I am hiding behind any facades, here is my email address, and I will strive to get back to everyone who may be interested enough to drop me a line, time permitting:

stanfordvictim.richard@gmail.com

Richard Watson
27th January 2011

LESS THAN THREE WEEKS BEFORE THE DEADLINE FOR STANFORD FINANCIAL GROUP INVESTORS TO SUBMIT CLAIMS

The deadline for FTCA claims by investors of the failed Stanford Financial Group against the US Securities and Exchange Commission is now just 20 days.

Investors in the failed Stanford International Bank, a part of the Stanford Financial Group, in receivership since the arrest of Allen Stanford, who is currently in detention in Houston awaiting trial on 23 charges of fraud, have just 17 days left to submit administrative claims under the Federal Tort Claims Act against the US Securities and Exchange Commission, for their negligence in not closing down Allen Stanford sooner, despite knowing for 13 years it was likely he was operating a Ponzi scheme. Had they done so earlier many thousands of investors would have been spared the loss of their life savings.


The deadline for claims is fast approaching. Unless claims are submitted correctly and timely before the two year Statute of Limitations expires, on the 16th February 2011, Stanford investors will be denied any recovery from the US government, forever.

Stanford investors have engaged an attorney to submit FTCA claims against the SEC. This action against the SEC is a real chance for full recovery of losses from the failed Stanford Financial Group. It will not prejudice any SIPC recovery efforts, and is open to all the Stanford investors, irrespective of nationality, or place of residence.

CLAIMS TAKE SEVERAL DAYS TO PROCESS AND MUST BE SUBMITTED CORRECTLY AND TIMELY BEFORE THE 16th FEBRUARY OR THEY WILL BE REJECTED

Any Stanford investors who have not yet decided, should contact their attorney at their earliest opportunity, or the attorney the Stanford investors have hired: Kachroo Legal Services of Cambridge, Mass, who already have considerable experience of submitting FTCA claims on behalf of the Madoff investors. Email: info@kachroolegal.com

Should any Stanford investors wish for more detail of the campaign and the various arguments, please register for our private investor’s forum, which is free of charge and available to all bona-fide investors in the failed Stanford Financial Group: http://svg.creatuforo.com/profile.php?mode=register


Written by David Brent

For Stanford International Victims Group

MORE QUESTIONABLE ADVICE - FROM COVISAL TO LATIN AMERICAN INVESTORS

The self-proclaimed ‘Leader’ of COVISAL, Jaime R. Escalona, continues to issue very questionable advice to Latin American Stanford investors.

Not only has he been requesting further ‘donations,’ now a questionnaire to register with Covisal has been issued to Latin American investors. This questionnaire requests extensive private and confidential information from Stanford victims, including; the amount of their investment; the objective of their investment, whether it was a retirement fund, family life savings, education fund, or to guarantee business loans, etc; bank details; credit card details; account statements; and even certain PIN numbers are requested.

I leave you to draw your own conclusions whether all this information is absolutely necessary to join a victim’s support group, and consider carefully what risks investors may face from the trust placed in Covisal if this information is misused, or otherwise falls into the wrong hands.

Furthermore, Covisal continues to advise investors to fill-out their own FTCA claim forms, without acknowledging the risks of such claims being incomplete; being submitted too late; or being otherwise ineligible. Please refer to some of the earlier posts for more detail of the risks involved in ‘self-filing.’ The amount of case-law and precedents that need to be understood is immense, and easy to confuse; you can easily imagine the potential for filing an incomplete or ineligible claim if your first language is not English.

We understand the ‘Leader’ of Covisal has even advised his followers that there is no urgency, to submit FTCA claims, as this is will be a class-action that all investors can join-in later. Anyone spouting such blatant misinformation should not be trusted further.

Should there be litigation, which will most likely become a class-action, ONLY those investors who have registered valid claims will be included. This is an action against the US Government under the FTCA, where the rules for eligibility are very different to other class-actions, and if the reason you give for the negligence of the SEC is significantly different to the rest of the class, your claim may not even be admissible into the class action. In which case you may have to go to court separately and litigate your claim on your own, at your own expense. Furthermore if you do not already have a contract with an attorney, such as the one we have negotiated with Kachroo Legal services for a 15% contingency, you may have to pay whatever the judge awards to the lead attorney, which could be as high as 25% contingency fees. In the past some attorneys have demanded as high as 32% contingency fees from Stanford investors who chose not to pay a retainer. Please be reminded our attorney has already offered to accept clients who are experiencing extreme hardship and can not afford to pay a retainer.

Finally, we understand the ‘Leader’ of Covisal continues to claim our attorney only has only been practicing for 6 years, when she actually has 22 years of experience , some of it highly relevant; has never lost a case; and is the most highly rated for her qualifications and experience. Anyone wishing to compare the rating of our attorney with any of the other Stanford attorneys should refer to the following link and draw their own conclusions:

http://www.avvo.com/attorneys/02142-ma-gaytri-kachroo-1356107.html and her CV can be found here: http://www.kachroolegal.com/docs/dr_kachroo_cv.pdf

Investors in the failed Stanford International Bank, a part of the Stanford Financial Group, in receivership since the arrest of Allen Stanford, who is currently in detention in Houston awaiting trial on 23 counts of fraud, have only a few days left to submit administrative claims under the Federal Tort Claims Act against the US Securities and Exchange Commission; for their negligence in not acting against Allen Stanford sooner, despite knowing for 13 years it was likely he was operating a Ponzi scheme.

The deadline for claims is fast approaching. Unless claims are submitted correctly and timely before the two year Statute of Limitations expires next month on the 16th February 2011, Stanford investors will be denied any recovery from the US government, forever.

The Stanford International Victims Group have engaged an attorney to submit FTCA claims against the SEC. This action against the SEC will not prejudice any SIPC recovery efforts, and is open to all the Stanford investors, irrespective of nationality, place of residence, or the Stanford entity in which they made their investments.

Any Stanford investors, who have not yet decided whether to join this action, should contact their own attorney at their earliest opportunity, or the attorney submitting the FTCA claims on behalf the Stanford International Victims Group: Kachroo Legal Services of Cambridge, Mass. who already have experience of submitting claims on behalf of the Madoff investors.
Email: info@kachroolegal.com

QUESTIONABLE ADVICE FROM THE STANFORD VICTIMS COALITION - ADVISING INVESTORS TO SELF-FILE FTCA CLAIMS ?

There has been correspondence from certain individuals, in particular Angela Kogutt, Founder and Director of the Stanford Victims Coalition, suggesting that FTCA claims are straightforward and that the forms are easy to fill-out. She has even suggested using hers as a template for other investors, presuming that ‘what caused her damages also caused theirs.’ This is a precarious presumption, and may not be such smart advice for those investors who have not fully researched FTCA claims.

Before using Mrs Kogutt’s SF-95 as a template for your claim, you may consider asking yourself some questions: Is the nature of your losses the same as hers? For instance, have you had other losses such as medical expenses? Have you lost your home or other properties as a result of losing your investment? May you be facing either of those possibilities in the future? Are you comfortable accepting her explanation as to why the SEC is responsible for your loss? If your copy of her claim should be rejected by the SEC as invalid, could you accept this? Would you be so upset that you consider her liable for influencing you to copy her claim? If you answer yes to any of these questions, then perhaps you should consult with your attorney or an experienced attorney who is both qualified and indemnified to give such advice.

As an aside, it is interesting to see that the Stanford Victims Coalition still somewhat disingenuously claim to be ‘an International Advocacy Group representing the best interests of 28,000 Stanford victims in 118 countries.’ Rather inappropriate after the SVC unilaterally abandoned all their overseas supporters to their fate, within days of Angela Kogutt being appointed to the Stanford Investors Committee last year. It is also interesting to note that it is now seemingly acceptable for SVC to state they ‘do not recommend’ any specific attorney, when in the past, as we all know, they endorsed an attorney who is now unwilling to litigate this case. With a new, experienced, and very highly qualified attorney willing to go the distance for us, one would think the SVC may be a little more proactive than to suggest that we file our own claims, simply because the attorney is not to their liking!

Enough of the SVC. So what can ‘self-filers’ expect to happen with their claims? If their administrative claims are properly constructed, then they may be able to get them filed with the SEC without paying any initial attorney fees; but if an award is ultimately made by the court; be aware, the judge may well award up to 25% to the ‘lead attorney’ as contingency fees. The ‘self-filers’ who do not have a contract for a 15% contingency fee, such as that negotiated by the Stanford International Victims Group with Kachroo Legal Services, may find they pay more in the end. If their claims have not already been rejected as ineligible that is; and remember, there are other attorneys out there who have retained many Stanford investors, some at whopping 32% contingency fees, who may also be considering a shot at the ‘lead attorney’ role.

Please bear in mind there is also the distinct possibility that individual investors who ‘self-file’ could be excluded from any future class action, even if they manage to successfully file their own claims, simply because their explanation why the SEC is responsible differs significantly from the explanation given by the rest of the class. In that case, they may have to argue their claim in court, on their own, and at their own expense.

Then there are the plethora of precedents, case-law, and other legal obstacles to be overcome in a trial, and remember there is also a correct and timely submission process just to be eligible, the details of which have been highlighted in previous posts. This is not for the faint hearted.
The deadline for claims is fast approaching. Unless claims are submitted correctly and timely before the two year Statute of Limitations expires next month on the 16th February 2011, Stanford investors will be denied any recovery from the US government, forever.

Please consult an attorney to submit your claim. Ensure that the attorney you hire is also willing to litigate your claim, should it be rejected or otherwise be ineligible, and choose one who already has experience of submitting FTCA claims.

Please contact your attorney without delay, or the attorney hired by the Stanford International Victims Group: Kachroo Legal Services, Cambridge, Mass., who already have extensive experience of submitting FTCA claims on behalf of the Madoff investors. Email: info@kachroolegal.com

Allen Stanford, former sole shareholder of the Stanford International Bank, a part of the Stanford Financial Group, now in receivership, is currently being detained awaiting trial in Houston, Texas, charged with 23 counts of fraud. The mastermind of an $8bn Ponzi scheme which caused 28,000 investors worldwide the loss of their life savings, many of whom could have been spared if the US Securities and Exchange Commission had acted when they first became aware Allen Stanford’s activities were likely a Ponzi scheme, 13 years ago.

Source: David Brent (Stanford International Victims Group)

STANFORD INVESTORS FROM MEXICO COLOMBIA AND ECUADOR JOIN FORCES

The campaign in Latin America is gaining momentum, with a substantial number of investors from Mexico, Colombia, and Ecuador having now having joined the campaign and submitting FTCA claims against the US Government Securities and Exchange Commission, for their negligence in failing to act sooner, knowing for 13 years Allen Stanford was likely operating a Ponzi scheme. Had they done so, many investors of the failed Stanford International Bank, a part of the Stanford Financial Group, now in receivership, may have been spared the loss of their life savings.

Allen Stanford is currently in detention in Houston, Texas, awaiting trial on 23 counts of fraud.

The deadline for FTCA claims against the US Securities and Exchange Commission is approaching fast. This is a real possibility for full recovery of losses sustained by all the Stanford investors, irrespective of nationality, or place of residence. All valid claims must be submitted correctly and timely before the 16th February 2011 deadline when the Statute of Limitations expires.

Any investors who have not consulted an attorney to submit their claims should do so without delay. Although the forms look straightforward enough, there is a plethora of case-law awaiting the unwary.
Please ensure that the attorney you engage is willing to take your claim forward, should it be rejected or otherwise ineligible, and has experience of submitting FTCA claims.

Please contact your attorney without delay, or the attorney hired by the Stanford International Victims Group: Kachroo Legal Services, Cambridge, Mass., who already have extensive experience of submitting FTCA claims for the Madoff investors.

Email:info@kachroolegal.com

ARE CERTAIN ADVISORS OF STANFORD BANK VICTIMS LINING THEIR OWN POCKETS?

Over the weekend one of the self-appointed and so called ‘leaders’ of a group of Stanford victims issued yet another request for ‘donations’ from the victims. It is regrettable there will always be those who prey on the weak and needy, continually asking for money from victims who have already given all they can afford to give, and for what? What exactly have these individuals achieved with all the donations they have received over the last two years? What have all the donations been spent on, and why do some individuals continue to keep asking for more, when they can show nothing constructive for all the money they have collected?

The Stanford International Victims Group does not condone requests for donations by any of these individuals. Please discard any correspondence you receive from them asking for money.

The team behind this campaign has worked tirelessly, and without any need to request donations from any of the victims, and have done so for the benefit of all the Stanford investors.

The deadline for FTCA claims against the US Securities and Exchange Commission is approaching fast. This is a real possibility for full recovery of losses sustained by all the Stanford investors, irrespective of nationality or place of abode. All valid claims must be submitted correctly and timely before the 16th February 2011 deadline when the Statute of Limitations expires.

Please consult an attorney to submit your claims. Although the forms look straightforward enough, there is a plethora of case-law awaiting the unwary. Please ensure that the attorney you engage is willing to take your claim forward, should it be rejected or otherwise ineligible, and has experience of submitting FTCA claims.

Please contact your attorney without delay, or the attorney hired by the Stanford International investors Group: Kachroo Legal Services, Cambridge, Mass., who already have extensive experience of submitting FTCA claims for the Madoff investors. Email:info@kachroolegal.com

STANFORD BANK FTCA CLAIM CAMPAIGN FACES INTERNET ATTACKS

In the last few weeks since we commenced this campaign to raise awareness amongst Stanford investors that they have a real possibility of full recovery of their losses by submitting administrative claims against under the FTCA against the US government Securities and Exchange Commission, we have experienced an unprecedented level of anonymous internet attacks; against this blog; some of the team who have worked tirelessly and without remuneration to pull this together; and against the attorney we have hired; including the leaking of private correspondence with officials in positions of authority.

It is clear there are certain individuals, groups, assemblies, and agencies that have a vested interest in trying to derail this campaign, but despite this we remain undeterred.

For any Stanford investors who are not yet aware of this option for full recovery of their losses; under the Federal Tort Claims Act, investors who suffered losses in the failed Stanford International Bank, a part of the Stanford Financial Group, can lodge administrative claims against the Securities and Exchange Commission for their negligence in failing to act sooner, despite knowing for 13 years Allen Stanford was likely a fraud. Allen Stanford is currently in detention in Houston awaiting trial on 23 counts of fraud.

The deadline for claims to be submitted is approaching fast. Unless all claims are submitted correctly and timely before the Statute of Limitations expires on February 16th 2011, Stanford investors will be barred from any recovery against the US government, forever.

Time is of the essence. Please contact your attorney without delay, or the attorney hired by the Stanford international investors: Kachroo Legal Services of Cambridge, Mass. who are experienced in submitting FTCA claims, having already done so for many Madoff investors. Email: info @kachroolegal.com

Judge refuses to release Stanford

Texas investment promoter Robert Allen Stanford tried just before Christmas to persuade a federal judge to release him from prison pending his $7 billion fraud trial in January 2011.

It was the second such attempt by Stanford, 59, who is alleged to have wrecked the retirement dreams of 30,000 investors from Baton Rouge to Brazil and other points around the world.

U.S. District Judge David Hittner needed just a single word to rule on the request: “Denied.”

Stanford’s defense team — Houston attorneys Kent A. Schaffer and George McCall Secrest Jr. — did not return calls Monday.

They argued in their pre-Christmas filing with Hittner that Stanford’s health has deteriorated during the six months that he has been in custody since his June indictment.

The defense attorneys added that a prison beating Stanford suffered in September contributed to his decline.

Schaffer and Secrest also argued the millions of documents involved in Stanford’s criminal case make it impossible for him to meaningfully participate in the planning of his defense while he remains at the federal detention center in Houston.

Another key point in their argument referred to confessed swindler Bernard Madoff of New York, who was allowed to remain free on bond before he pleaded guilty to felony charges that netted him a prison term of 150 years.

Madoff, whose frauds totaled more than $50 billon, and several other recently convicted white-collar criminals did not flee prior to their convictions, Schaffer and Secrest noted.

Stanford appealed Hittner’s initial refusal to permit him release on bond to the 5th U.S. Circuit Court of Appeals in New Orleans.

Circuit judges Edith Brown Clement, Priscilla Owen and Emilio Garza upheld Hittner’s decision in August, ruling that “Stanford’s arguments are without merit.”

The 5th Circuit panel also said in August: “Stanford has the means, the motive and the money to flee.”

In Baton Rouge on Monday, attorney Winston G. Decuir Jr. said Stanford’s new argument concerning the pre-trial release of Madoff and other white-collar criminals might justify another appeal to the 5th Circuit. Decuir is not involved with the Stanford case.

Decuir, who regularly practices in federal courts, said Stanford’s argument for pre-trial release does not carry a high chance of success.

“It wouldn’t surprise me to see federal prosecutors use the Bernie Madoff case the other way,” Decuir said, noting that Madoff received a prison term of 150 years.

“No one expected Bernie Madoff to get that kind of time,” Decuir said.

Younger people convicted of massive white-collar crimes might not run from a 10-year prison term, Decuir said.

Many people might be tempted to run from possible prison terms in excess of a century. And prosecutors probably would use that argument in any debate over Stanford’s requested release, Decuir added.

The 5th Circuit also may not be impressed by Stanford’s argument that he needs release from prison to help his attorneys sift through millions of documents, Decuir said.

“Today, you can put a million pages on a CD-ROM, slap it in a laptop and meet with your client in prison,” Decuir noted.

Stanford has developed heart problems since his arrest and undergone surgery for an aneurysm, his attorneys told Hittner last week.

When Stanford was beaten at a detention center near Conroe, Texas, his attorneys told the judge, he suffered a broken nose and fractures near his right eye that required reconstructive surgery.

The attorneys added that Stanford has lost 40 pounds and sometimes coughs up blood.

Decuir said, however, that reports of deteriorating health often are not “sufficient to persuade a judge to change his or her mind.”

Approximately $1 billion of the Stanford losses occurred in the Baton Rouge, Lafayette and Covington areas, state Rep. Bodi White, R-Central, and Baton Rouge lawyer Phillip W. Preis estimated earlier this year.

Stanford won't be released, judge rules

Fallen financier R. Allen Stanford won’t be released from jail before his fraud trial in 2011, a U.S. judge ruled after reviewing a doctor’s report that the accused is close to “a complete nervous breakdown.”

Attorneys for Stanford, who faces 21 criminal counts for allegedly swindling investors out of more than $7 billion, asked U.S. District Judge David Hittner in Houston yesterday to reconsider his earlier ruling denying bail out of concern the defendant might flee. They submitted reports from two psychiatrists who’d examined Stanford, 59, and found him suffering from severe depression triggered by his incarceration under conditions that render him unable to help in his defense.

“Having considered the motion along with the exhibits attached thereto, and the applicable law, the court determines the motion should be denied,” Hittner wrote in an order today.

Stanford has been jailed since his arrest June 19 and is in a federal detention center in downtown Houston. Stanford’s lawyers said in a Dec. 21 filing that one of the psychiatrists determined that the financier’s mental and physical health had deteriorated sharply.

“If the present set of circumstances persist, Mr. Stanford’s spiraling downhill course will continue to the point where he will suffer serious physical disorders and, more likely than not, a complete nervous breakdown,” the doctor’s report said, according to the filing.

Stanford and three former top executives at Stanford Financial Group are charged with running a Ponzi scheme that paid above-market rates to early investors by taking money from later investors in certificates of deposit sold by Antigua-based Stanford International Bank. Stanford is accused of skimming about $1.6 billion from depositors to fund a lavish lifestyle that included a fleet of jets, yachts, multiple homes and a private island in the Caribbean.

Stanford faces spending the rest of his life in prison if he’s convicted at a trial set to begin in January 2011. The financier denies all wrongdoing in connection with both the criminal case and the parallel civil fraud lawsuit brought against him and the same associates by the U.S. Securities and Exchange Commission.

Stanford’s lawyer complained that without Internet access and frequent communication with his defense team, the jailed financier cannot adequately review more than 7 million documents in the government database or answer questions from attorneys and accountants hired to defend him.

“The issues we raised were real, as well as legally and factually compelling,” attorney Kent Schaffer said in an e-mail today. “I am surprised that we were shot down so abruptly and without a response from the government or a hearing. I am not sure how Allen will be able to participate in assisting in his own defense and, the truth is, he probably won’t be.”

Antigua AG on Regulatory Investigation