Investors in Sir Allen Stanford’s alleged $7bn Ponzi scheme may be able to recover about one-fifth of their principal, according to the receiver appointed by the US courts to administer the estate’s assets.
Sir Allen, who is facing a criminal indictment as well as a civil suit filed by the Securities and Exchange Commission, has denied all the allegations against him.
In a report filed late on Wednesday, Dallas lawyer Ralph Janvey said cash on hand at the Stanford estate totalled $128.8m, and that he was trying to recover a further $894m.
“We have identified over $1.5bn in assets that ultimately could be available to the victims of the Stanford fraud,” he said in a statement. “We may be able to return to them as much as 20 cents on the dollar, just based on activities to date.”
Mr Janvey has been aggressive in his attempts to recover cash and other assets of the complex Stanford empire, which stretched from Houston to Venezuela.
The epicentre of the alleged fraud – Stanford International Bank, which issued high-yielding certificates of deposit to investors around the world – was domiciled in Antigua.
Among the assets listed was Sir Allen’s yacht, the Sea Eagle, which the Texan businessman bought for $3.9m and on which he spent an additional $16m in “upgrades” such as replacing the teak interior with mahogany and putting in a new galley kitchen, according to court papers.
Some of the receiver’s methods – which have included attempts to claw back principal and interest from victims of the alleged fraud and to recoup money paid to former employees – have irked the SEC. The regulator has accused Mr Janvey of overstepping his authority in the matter.
The receiver has also faced criticism regarding his fee requests. Mr Janvey has billed the estate for more than $35m to date, according to court documents. The sum covers the services provided by the receiver and the small army of lawyers, consultants and forensic accountants assisting in the recovery effort, which began in February.
According to the report, more than 40 per cent of the cash on hand has been allocated towards covering those operational and professional expenses.
John Little, the examiner appointed to represent the interests of the Stanford investors, has objected to Mr Janvey’s requests, noting the fees will have to be paid out of the limited cash pool that will ultimately be used to reimburse depositors. Mr Little opposed the receiver’s clawback requests on similar grounds, saying the costs of litigation would likely outstrip the cash recovered.
Kent Shaffer, Sir Allen’s criminal defence attorney, told the Financial Times the receiver and his colleagues were “looting the revenues” of the Stanford companies.
Mr Janvey told the FT the criticisms were “simply part of a tired and fruitless effort to shift attention away from Stanford, who is responsible for a worldwide multibillion dollar financial fraud that has hurt tens of thousands of people”.
Showing posts with label personal assets. Show all posts
Showing posts with label personal assets. Show all posts
Saturday, 31 October 2009
Sunday, 13 September 2009
No guarantee of insurance for Stanford execs
Lloyd's of London said a federal judge should not allocate the proceeds of a directors and officers insurance policy for accused swindler Allen Stanford and other executives because they have no guarantee of coverage, according to a court filing on Friday.
A number of Stanford executives, including Stanford and former Chief Investment Officer Laura Pendergest-Holt, have filed claims against the policy issued by Lloyd's.
Stanford and Pendergest-Holt had their assets frozen in February when the U.S. Securities and Exchange Commission filed civil fraud charges, alleging a "massive" Ponzi scheme.
The asset freeze has left the executives unable to pay their defense lawyers, they have said in numerous court filings.
Lloyd's initially agreed to reimburse some "reasonable and necessary legal expenses," for Pendergest-Holt, but Ralph Janvey, the receiver in the case, argued proceeds are assets of the Stanford estate.
He threatened to hold Lloyd's in contempt of court if they made payments to the Stanford executives, court papers show.
In response, lawyers for Pendergest-Holt filed a motion asking U.S. District Judge David Godbey in Dallas, who is overseeing the civil fraud case, to clarify whether the insurance proceeds should go to the receiver.
If the court determines the policy proceeds were assets of the estate, then the funds should be allocated to pay defense costs in accordance with the insurance policy, Pendergest- Holt's motion, said.
But Janvey has also asked the judge to allocate the majority of the insurance proceeds to the receivership.
"While there is an urgent need for this court to address the issue of whether the policies' proceeds are assets of the receivership estate, the court cannot and should not allocate proceeds or rule on who is entitled to coverage under the policies because underwriters do not concede that claims submitted by Holt or the receiver are covered," lawyers said in a filing.
Claims resulting from "money laundering, and from dishonest, fraudulent, or criminal acts, are excluded from coverage, Lloyd's said in court papers.
Stanford and Pendergest-Holt are charged with fraud, conspiracy and obstruction in a 21-count criminal indictment. Prosecutors say they and others duped investors through the sale of $7 billion in fraudulent certificates of deposit.
Both have denied wrongdoing.
Jeffrey Tillotson, a lawyer for Pendergest-Holt said it was clear his client is covered by the Lloyd's policy and he welcomes the involvement of insurance carrier in the matter.
At a court hearing in Dallas on Thursday, Judge Godbey said consideration of the matter was near the top of his list
The civil fraud cases is filed in federal court in Dallas under 3:09-cv-00298-N Securities and Exchange Commission v. Stanford International Bank Ltd et al.
A number of Stanford executives, including Stanford and former Chief Investment Officer Laura Pendergest-Holt, have filed claims against the policy issued by Lloyd's.
Stanford and Pendergest-Holt had their assets frozen in February when the U.S. Securities and Exchange Commission filed civil fraud charges, alleging a "massive" Ponzi scheme.
The asset freeze has left the executives unable to pay their defense lawyers, they have said in numerous court filings.
Lloyd's initially agreed to reimburse some "reasonable and necessary legal expenses," for Pendergest-Holt, but Ralph Janvey, the receiver in the case, argued proceeds are assets of the Stanford estate.
He threatened to hold Lloyd's in contempt of court if they made payments to the Stanford executives, court papers show.
In response, lawyers for Pendergest-Holt filed a motion asking U.S. District Judge David Godbey in Dallas, who is overseeing the civil fraud case, to clarify whether the insurance proceeds should go to the receiver.
If the court determines the policy proceeds were assets of the estate, then the funds should be allocated to pay defense costs in accordance with the insurance policy, Pendergest- Holt's motion, said.
But Janvey has also asked the judge to allocate the majority of the insurance proceeds to the receivership.
"While there is an urgent need for this court to address the issue of whether the policies' proceeds are assets of the receivership estate, the court cannot and should not allocate proceeds or rule on who is entitled to coverage under the policies because underwriters do not concede that claims submitted by Holt or the receiver are covered," lawyers said in a filing.
Claims resulting from "money laundering, and from dishonest, fraudulent, or criminal acts, are excluded from coverage, Lloyd's said in court papers.
Stanford and Pendergest-Holt are charged with fraud, conspiracy and obstruction in a 21-count criminal indictment. Prosecutors say they and others duped investors through the sale of $7 billion in fraudulent certificates of deposit.
Both have denied wrongdoing.
Jeffrey Tillotson, a lawyer for Pendergest-Holt said it was clear his client is covered by the Lloyd's policy and he welcomes the involvement of insurance carrier in the matter.
At a court hearing in Dallas on Thursday, Judge Godbey said consideration of the matter was near the top of his list
The civil fraud cases is filed in federal court in Dallas under 3:09-cv-00298-N Securities and Exchange Commission v. Stanford International Bank Ltd et al.
Friday, 14 August 2009
Stanford Receiver Faults Home Sale by Financier’s Ex-Girlfriend
R. Allen Stanford’s court-appointed receiver asked a judge to sanction a Florida woman, who uses the Texas financier’s name and has two out-of-wedlock children by him, for selling a mansion the receiver hoped to seize to repay investors.
Stanford receiver Ralph Janvey said he wants U.S. District Judge David Godbey to find Rebecca Reeves-Stanford and her Florida attorneys in contempt for selling a $3 million house in May, after she learned Stanford’s assets were being sought to repay investors allegedly swindled in a $7 billion Ponzi scheme.
Reeves-Stanford, a resident of Key Biscayne, near Miami, is “one of several ‘outside wives’ with whom Stanford had an ongoing relationship” for “nearly two decades,” Kevin Sadler, Janvey’s attorney, said in court papers filed yesterday in federal court in Dallas.
Reeves-Stanford’s newest lawyer, Bradford M. Cohen of Fort Lauderdale, Florida, said Janvey won’t succeed in having his client or her previous attorneys found in contempt.
“The freeze order affects third parties who received something without consideration, and Rebecca Reeves-Stanford never received anything without consideration,” Cohen said in a phone interview. “She has two children by Allen Stanford.”
Cohen also said the house was in Reeves-Stanford’s name before she sold it.
2005 Purchase
Sadler said Reeves-Stanford’s attorney confirmed that Stanford paid $1.4 million of the Florida property’s 2005 purchase price.
“Indeed, the amount is likely far higher as Reeves- Stanford has no other apparent means of support beyond the ill- gotten funds Stanford lavished on her,” Sadler said in the filing. He also claimed Reeves-Stanford transferred the sale proceeds to an offshore account in the Cook Islands, in an attempt to keep the money out of Janvey’s hands.
Janvey, a Dallas securities lawyer, has been marshalling Stanford’s corporate and personal assets since the U.S. Securities and Exchange Commission sued the financier on Feb. 17. The SEC accuses Stanford of diverting as much as $1.6 billion from bogus certificates of deposit sold by Antigua- based Stanford International Bank Ltd. to fund a lifestyle that included multiple homes, a fleet of jets, a yacht and a private Caribbean island.
205th-Richest American
Stanford, who was ranked the 205th-richest American in 2008 by Forbes magazine, denies all wrongdoing and has been in jail without bond since he was arrested at the home of his fiancée, Andrea Stoelker, on June 18. He faces 21 criminal counts that mirror the SEC claims and may spend the rest of his life in prison if convicted of the most serious charges.
Stanford and Stoelker moved into a rented high-rise condominium in Houston’s museum district in April, after they were locked out of his apartments in Houston, Miami, Antigua and St. Croix by the February court order freezing his assets. A friend prepaid the $36,000 annual rent on the unit, which is located near the offices of Stanford’s Houston lawyer.
The receiver also has made property claims against Stanford’s estranged wife, Susan.
This month, Janvey asked Godbey to find Susan Stanford and the couple’s 26-year-old daughter, Randi, in contempt for refusing to cooperate with efforts to sell the $1.3 million Houston condominium that has been the daughter’s residence for several years. Janvey asked Godbey’s permission to evict the women immediately, although he had previously offered to let them live in the 2,803-square-foot unit in Houston’s River Oaks neighborhood until it was sold.
Randi Stanford
Randi Stanford’s lawyer yesterday submitted a copy of the initial check for $20,000 she claims to have used to buy the condominium in 2006, as part of a filing urging the judge to reject Janvey’s request to evict her.
Janvey also listed Susan Stanford’s residence, a $2.4 million, 7,000-square-foot Mediterranean-style mansion in Houston’s Tanglewood neighborhood, as one of the properties he hopes to sell to repay defrauded investors.
Susan Stanford, Allen’s wife of more than 33 years, began divorce proceedings in November 2007. The couple has been separated for 10 years, according to Bucky Allshouse, Stanford’s Texas divorce lawyer. She has offered to testify against him in the SEC case, and in February filed court papers indicating the former billionaire was already $250,000 in arrears on her $100,000 monthly court-ordered support payments.
Six Children
Allen Stanford told Bloomberg News in April that he has six children, ranging in age from 12 to 26 years old. At least four of these children, accompanied by their mothers, attended his June 25 arraignment in Houston federal court.
Stanford’s extended family crowded into two rows at the front of the courtroom gallery that day, where Stanford occasionally flashed the children a smile or a thumbs-up gesture. The ex-girlfriends greeted one another cordially, and the children exchanged hugs with one another and with Stanford’s 31-year-old fiancée, Andrea.
Louise Sage-Stanford, who said in a March 2008 Florida paternity filing that Allen Stanford paid more than $850,000 a year in housing, food and education costs for their two children, was among the extended family members attending his June arraignment. Sage-Stanford and her two children have since moved to Houston, where they’ve rented a condominium in the same building as Stanford and his fiancée, according to court papers.
Two Previous Lawyers
Janvey is asking that Reeves-Stanford’s two previous lawyers -- Melida Viera and John Priovolos, both of Miami -- be held in contempt for allegedly facilitating her sale of the property and movement of the proceeds to an offshore account. Priovolos declined to comment. Viera couldn’t be reached for comment after regular business hours yesterday.
Kevin Callahan, an SEC spokesman, and Stanford’s criminal- defense lawyer, Dick DeGuerin, declined to comment on Janvey’s filing.
The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09cv298, U.S. District Court, Northern District of Texas (Dallas). The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston).
Stanford receiver Ralph Janvey said he wants U.S. District Judge David Godbey to find Rebecca Reeves-Stanford and her Florida attorneys in contempt for selling a $3 million house in May, after she learned Stanford’s assets were being sought to repay investors allegedly swindled in a $7 billion Ponzi scheme.
Reeves-Stanford, a resident of Key Biscayne, near Miami, is “one of several ‘outside wives’ with whom Stanford had an ongoing relationship” for “nearly two decades,” Kevin Sadler, Janvey’s attorney, said in court papers filed yesterday in federal court in Dallas.
Reeves-Stanford’s newest lawyer, Bradford M. Cohen of Fort Lauderdale, Florida, said Janvey won’t succeed in having his client or her previous attorneys found in contempt.
“The freeze order affects third parties who received something without consideration, and Rebecca Reeves-Stanford never received anything without consideration,” Cohen said in a phone interview. “She has two children by Allen Stanford.”
Cohen also said the house was in Reeves-Stanford’s name before she sold it.
2005 Purchase
Sadler said Reeves-Stanford’s attorney confirmed that Stanford paid $1.4 million of the Florida property’s 2005 purchase price.
“Indeed, the amount is likely far higher as Reeves- Stanford has no other apparent means of support beyond the ill- gotten funds Stanford lavished on her,” Sadler said in the filing. He also claimed Reeves-Stanford transferred the sale proceeds to an offshore account in the Cook Islands, in an attempt to keep the money out of Janvey’s hands.
Janvey, a Dallas securities lawyer, has been marshalling Stanford’s corporate and personal assets since the U.S. Securities and Exchange Commission sued the financier on Feb. 17. The SEC accuses Stanford of diverting as much as $1.6 billion from bogus certificates of deposit sold by Antigua- based Stanford International Bank Ltd. to fund a lifestyle that included multiple homes, a fleet of jets, a yacht and a private Caribbean island.
205th-Richest American
Stanford, who was ranked the 205th-richest American in 2008 by Forbes magazine, denies all wrongdoing and has been in jail without bond since he was arrested at the home of his fiancée, Andrea Stoelker, on June 18. He faces 21 criminal counts that mirror the SEC claims and may spend the rest of his life in prison if convicted of the most serious charges.
Stanford and Stoelker moved into a rented high-rise condominium in Houston’s museum district in April, after they were locked out of his apartments in Houston, Miami, Antigua and St. Croix by the February court order freezing his assets. A friend prepaid the $36,000 annual rent on the unit, which is located near the offices of Stanford’s Houston lawyer.
The receiver also has made property claims against Stanford’s estranged wife, Susan.
This month, Janvey asked Godbey to find Susan Stanford and the couple’s 26-year-old daughter, Randi, in contempt for refusing to cooperate with efforts to sell the $1.3 million Houston condominium that has been the daughter’s residence for several years. Janvey asked Godbey’s permission to evict the women immediately, although he had previously offered to let them live in the 2,803-square-foot unit in Houston’s River Oaks neighborhood until it was sold.
Randi Stanford
Randi Stanford’s lawyer yesterday submitted a copy of the initial check for $20,000 she claims to have used to buy the condominium in 2006, as part of a filing urging the judge to reject Janvey’s request to evict her.
Janvey also listed Susan Stanford’s residence, a $2.4 million, 7,000-square-foot Mediterranean-style mansion in Houston’s Tanglewood neighborhood, as one of the properties he hopes to sell to repay defrauded investors.
Susan Stanford, Allen’s wife of more than 33 years, began divorce proceedings in November 2007. The couple has been separated for 10 years, according to Bucky Allshouse, Stanford’s Texas divorce lawyer. She has offered to testify against him in the SEC case, and in February filed court papers indicating the former billionaire was already $250,000 in arrears on her $100,000 monthly court-ordered support payments.
Six Children
Allen Stanford told Bloomberg News in April that he has six children, ranging in age from 12 to 26 years old. At least four of these children, accompanied by their mothers, attended his June 25 arraignment in Houston federal court.
Stanford’s extended family crowded into two rows at the front of the courtroom gallery that day, where Stanford occasionally flashed the children a smile or a thumbs-up gesture. The ex-girlfriends greeted one another cordially, and the children exchanged hugs with one another and with Stanford’s 31-year-old fiancée, Andrea.
Louise Sage-Stanford, who said in a March 2008 Florida paternity filing that Allen Stanford paid more than $850,000 a year in housing, food and education costs for their two children, was among the extended family members attending his June arraignment. Sage-Stanford and her two children have since moved to Houston, where they’ve rented a condominium in the same building as Stanford and his fiancée, according to court papers.
Two Previous Lawyers
Janvey is asking that Reeves-Stanford’s two previous lawyers -- Melida Viera and John Priovolos, both of Miami -- be held in contempt for allegedly facilitating her sale of the property and movement of the proceeds to an offshore account. Priovolos declined to comment. Viera couldn’t be reached for comment after regular business hours yesterday.
Kevin Callahan, an SEC spokesman, and Stanford’s criminal- defense lawyer, Dick DeGuerin, declined to comment on Janvey’s filing.
The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09cv298, U.S. District Court, Northern District of Texas (Dallas). The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston).