Joint Liquidators Take Action Court Action

Antigua St. John's - The joint liquidators of the Stanford International Bank Ltd (SIBL) obtained authorisation from the Antiguan court to take back funds from holders of certificates of deposit (CDs).

According to a release, most of the victims are from Venezuela, other countries in Latin America, and the United States. They sent a letter asking for the return of money withdrawn from their accounts during the six months prior to the collapse of the SIBL, and demanded a response within 120 days of receipt of the letter.

COViSAL’s response can be read at: http://covisal.blogspot.com/2014/02/stanfords-victims-defrauded-again-by.html



According to the release, “families who had their life savings deposited at SIBL, were completely unaware of any problems the bank was having. There were no red flags or suspicious circumstances known to the depositors, who continued doing business with SIBL during its regular commercial operations until the bank closed its doors in 2009. It is a fact that the majority of depositors only became aware of trouble at SIBL when the SEC seized Stanford Financial Group on February 17, 2009.”

Covisal’s director said, “The withdrawals made from their savings during the six months prior to the closing of SIBL’s operations, were not ‘Preferential Payments,’ but legitimate withdrawals of part of the principal invested by the rightful owners of the money. These withdrawals were made rightfully and in good faith. Families withdrew part of their invested principal regularly to pay for living expenses, medical treatments, relatives in need, down payments, business expenses, etc.”



Families lost their livelihood in Stanford’s fraud; many sold their homes and what other assets they had left in order to survive for the past five years. The majority of depositors at SIBL are common people, families who worked very hard for 30-40 years to save money for their retirement, for a college fund for their children or grandchildren, and to have savings available for a medical emergency, among other things. Since the closing of SIBL in 2009, victims of the fraud have been living in dire straits; the Stanford fiasco destroyed their lives.



According to court records, the bank’s run might have happened the week of February 9, 2009 at the earliest.

According to the release, “If the management of SIBL permitted the redemption of CDs in the six months leading up to February 23, 2009, it was most likely their Preferred Customers who withdrew their money plus interest - unfairly prejudicial against all CD creditors and depositors at SIBL.”



The joint liquidators sent a summary of receipts and payments that shows receipts of $108.8 M as of December 31, 2013. Of this amount, $95.1 M was part of the $100 million that UK authorities confiscated following a request from the US Department of Justice on April 2009. The liquidators so far have spent $58.6 M. The release questioned, “Why are the expenses so vague and lacking in supportive evidence? What honest and transparent legal entity is providing oversight of the liquidation’s affairs? The real accomplishment of the Joint Liquidators seems to be in giving themselves ‘Preferential Payments’.”



The Open Letter from COViSAL to the Antiguan Court and the Joint Liquidators can be read here

To join the debate 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/

Joint Comments by the U.S. Receiver, the Examiner and the Official Stanford Investors Committee Concerning the Liquidators' Efforts to Recover Preference Payments

Joint Comments by the U.S. Receiver, the Examiner and the Official Stanford Investors Committee Concerning the Liquidators' Efforts to Recover Preference Payments - The U.S. Receiver, the Examiner, and the Official Stanford Investors Committee understand that certain SIBL CD investors have received letters or emails from Marcus Wide and Hugh Dickson, the Joint Liquidators appointed by the Antiguan courts to oversee the Antiguan liquidation of SIBL, through which the Joint Liquidators seek to recover from the investors certain amounts (referred to as "preference payments") that the investors had withdrawn or otherwise received from SIBL during the 6 months' prior to the failure of SIBL. We also understand that these letters and/or emails are causing considerable distress and concern among SIBL CD investors. We wish to clarify the following matters:

1.The U.S. Receiver, the Examiner, and the Official Stanford Investors Committee have no involvement in the Joint Liquidators' effort to recover these "preference payments." The Joint Liquidators are proceeding pursuant to Antiguan law and with the approval of the Antiguan courts. Similarly, the U.S. District Court overseeing the Stanford Receivership has no role in or jurisdiction over the Joint Liquidators' efforts to recover these "preference payments."

2.The Antiguan Joint Liquidators have posted a set of Frequently Asked Questions concerning their effort to recover "preference payments" on their website. You can review those Frequently Asked Questions at http://www.sibliquidation.com

3.We understand that the Antiguan court has established a process for objecting to the Joint Liquidators' effort to recover these "preference payments." In the first instance, any objections must be directed to the Joint Liquidators at Stanford.enquiries@uk.gt.com. Objections must be filed within 120 days after the investor receives the letter or email asserting the Joint Liquidators' claim for these "preference payments."

4.At present, the Joint Liquidators are not permitted to bring lawsuits in the United States to recover these "preference payments," nor for any other purpose.

To join the debate 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/

AG Hints at Receivers’ Real Estate Interest

Antigua St. John's - Minister of Legal Affairs Attorney General Justin Simon has said Antigua & Barbuda’s biggest concern in the ongoing Stanford Investment Bank liquidation process should be real estate that could be targeted by court-appointed receiver Ralph Janvey.
The AG tabled the notion in response to Caribarena’s queries about the possibility of Janvey turning his attention to attorneys in Antigua & Barbuda associated with R Allen Stanford.

Janvey has initiated legal action against an attorney in Texas and two law firms he was affiliated, alleging that he aided in the US$7 billion Ponzi Scheme by obstructing initial federal investigations into Stanford’s operations several years ago.

“The Stanford Investment Bank Limited (SIBL) receivers are primarily concerned with tracing assets to pay off investors and are of the view that the Stanford Development Company properties were purchased from SIBL monies,” the attorney general said.

He added that control of these properties is his primary concern, with what appears to be a strategic approach currently in action.

“This thing is open and the action strategic,” the AG said, declining to be more specific about persons or attorneys of interest at this time. “We could not be more specific. I will not point a finger at anyone.”

On Sunday, a spokesperson for the Stanford Victims Group took the same stance, also declining to comment specifically on any particular personality that might be in the spotlight.


For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/

The Stanford International Victims Group Forum

Antiguan Liquidators letter to Senators re Senate Resolution 436

The Honorable David Vitter
SH-516
United States Senate
Washington, DC 20510

The Honorable Richard C. Shelby
SR -304
United States Senate
Washington, DC 20510

The Honorable Thad Cochran
SD-113
United States Senate
Washington, DC 20510

The Honorable Roger Wicker
SD-555
United States Senate
Washington, DC 20510

12 December, 2011

Dear Sirs,
Re: Senate Resolution 346
Re: Stanford International Bank Limited in Liquidation

I am writing in response to your recent introduction of Senate Resolution 346 which takes exception to certain alleged actions by the Government of Antigua and Barbuda (GoAB) related to the fraud perpetrated by Robert Allen Stanford and by implication the process for the liquidation of Stanford International Bank Limited (SIBL). I believe it is important to correct and/or clarify a number of assertions contained in the resolution as they relate to the activities of the Joint Liquidators of SIBL.

By way of background, Hugh Dickson and I, from the international firm of Grant Thornton, were appointed Joint Liquidators of Stanford International Bank Limited (SIBL) by the High Court of Antigua (Court), part of the Eastern Caribbean Court Circuit based in St Lucia. The final court of appeal from the High Court of Antigua is to the Law Lords of the British Privy Council. Mr. Dickson and I are experienced Liquidators with collectively sixty years of work in the field. Our appointment resulted from an application to Court by a group of victims not the GoAB or its agencies.

We note that S Res 346 seems not to draw a distinction between the Court ordered liquidation (bankruptcy) of SIBL in Antigua, and the GoAB itself. As Court officers we are independent of the GoAB, do not report to the GoAB, do not take direction from the GoAB, and, if necessary, we will be adverse to the GoAB and any of its agencies. Finally any funds we recover cannot be accessed by GoAB. That we are in some way associated with or an Agent of GoAB is a falsehood perpetuated by certain parties in the US.

Our appointment arises from the International Business Corporations Act (IBCA) of Antigua, under which the bank was incorporated. This contains a statutory obligation to gather in the assets of SIBL, and distribute them to its creditors under a process set out in the IBCA and the 1986 English Insolvency Rules. In short, our mission is to recover an estimated $4.5 billion in losses stemming from the fraud perpetrated by Allen Stanford and return the money to all 21,000 creditors/victims (of which around 16% by depositor number and 22% by value are American) in the shortest time possible.

We are guided by an uncompensated Creditors Committee composed of victims who are not allowed to profit from the Liquidation. We have held two web-based creditor meetings. The first meeting resulted in over three thousand creditor emails expressing their concerns, and what they would like to see happen to maximise their recovery. The second meeting results are still coming in. We intend to do this regularly. As far as we know, we are the first to engage the creditors/victims directly to ask what they want.

The Receiver has reported to the US court that he has ceased any proceeding outside the US. We believe that there are substantial recoveries available in a number of international jurisdictions. We are vigorously pursuing these for the benefit of the creditor/victims.

With this background in mind we are concerned that SR. 346 is in part based on a misunderstanding of the facts.

Firstly the GoAB does not have control of any of the SIBL lands. These are in our possession. We are devising a strategy, with expert advice, to maximise value for the creditor/victims.

An equity receiver, such as Mr. Janvey (Receiver) appointed at the request of the US Securities and Exchange Commission (SEC) has significant limitations to his authority. Our only intent is to provide a solution to some of these limitations through the exercise of remedies not available to the Receiver but available to us through Chapter 15. This will increase total recoveries to victims. We have stated our intent often and to confirm it we drafted and delivered a detailed proposal for cooperation to the Receiver. This proposal was rejected out of hand. Any standing granted will be subject to control by the US Court. To be clear we are not seeking to intervene in anyway with the plethora of entities over which the Receiver has control except for this limited purpose in SIBL under the control of the US Court.

Receiver was not recognised in Antigua largely as a consequence of these limitations in authority. However we are advised by our own legal counsel that the Receiver was, and is, entitled to appear in any proceeding in Antigua with respect to SIBL. We have no objection to him doing so as confirmed in the draft cooperation proposal he rejected. The Receiver has terminated his legal counsel in Antigua and presumably chosen not to appear.

There is criticism of us for not attempting to collect sums allegedly due from the GoAB. SIBL’s records fail to provide evidence that SIBL advanced money to GoAB, as confirmed by sworn reports of the Receiver and his forensic expert filed in Dallas last week. In this the loans referred to appear to have been advanced to GoAB through other entities, mostly under the Receiver’s control. He has not advanced those claims to date.

The process under which the Department of Justice (DoJ) seeks to “repatriate” assets to the US does not in our view allow these funds to be equitably, quickly and cheaply distributed to victims. On the contrary had these funds been allowed to flow into the Liquidation at the outset, a large distribution to creditor/victims could already have taken place. We have met with officials of the Asset Forfeiture and Money Laundering Section (AFMLS) at DoJ and we have also met with officials of the SEC, to try to find a mechanism to work together to achieve the common goal of maximising recoveries for the victims. We intend to continue these dialogues.

We have provided documents to the DoJ to assist them in the prosecution of Mr. Stanford and will continue to assist them where we can.

We are also trying to co-ordinate the claims process in both jurisdictions so that only one claim need be filed with a single pool from which victims’ claims are paid, overseen by both the US and Antiguan Court. If we are successful, this will significantly mitigate costs.

We are investigating the issue of Bank of Antigua (BoA)and its expropriation by the Eastern Caribbean Central Bank (ECCB), the Central Bank for all nine Eastern Caribbean countries. There is an independent valuation report by Ernst & Young, which indicates the shares BoA, a domestic bank serving Antiguans, had negative value, and that a bailout, with an injection of capital by ECCB was required to protect innocent depositors.

We cannot comment on other issues raised in S Res 346 outside the Liquidation of SIBL.

In summary, we have put significant effort into our attempts to co-ordinate our work with that of the US DoJ, SEC and the Receiver, in order to maximize the total return to the creditor/victims in a manner consistent with our statutory obligations, the direction of Antiguan High Court, and with respect to any standing granted in the US, the US Court. We are deeply concerned that language such as that proposed in your resolution may inadvertently be detrimental to this process.

To this end we would welcome a meeting with you to expand on our comments so you can determine your position on the matter based on all the facts.


Yours truly

Marcus A. Wide, Joint Liquidator
For the Joint Liquidators of Stanford International Bank Limited

Copies. Department of Justice
Securities and Exchange Commission

In Dallas Federal Court, Those Swindled by Allen Stanford Sue SEC For Failing to Stop Him

Spencer Barasch is a partner at the downtown Dallas law firm Andrews Kurth, where he is in charge of the corporate governance and securities enforcement team. But before that, and for close to 20 years, he worked for the Fort Worth office of the Securities and Exchange Commission, including a tenure as head of its enforcement program. It was under his watch that Allen Stanford swindled billions out of investors.

Eleven month ago, the SEC's inspector general all but blamed Barasch for allowing the Texas financier's Ponzi scheme to prosper, insisting in a 151-page report that for years he looked the other way on Stanford's behalf. Barasch never responded, but his friends claimed he'd been scapegoated by the feds -- even though Barasch wound up doing some work for Stanford in 2006, shortly before the SEC filed charges against Pete Sessions's pal.

Yesterday, but blocks away from the attorney's downtown office, some of the investors swindled by Stanford filed a federal suit against the government, claiming that the SEC and Barasch's refusal to shut down Stanford's operation years earlier -- say, in 1997, when he first appeared on the feds' radar screen -- resulted in their pockets being picked clean. Long story short:

This complaint is filed on behalf of the plaintiffs ... who, because of the negligence and misconduct of employees of the United States Securities and Exchange Commission ("SEC"), lost their investments in Stanford International Bank, Ltd ("SIBL"). The SEC employees were at all times material acting within the scope and course of their offices and employment, and under circumstances in which their employer, the United States, if a private person, would be liable to the plaintiffs in accordance with the law of the place where their acts or omissions occurred.

SIBL and its affiliated or related companies, including Stanford Group Company (SFG), were known at all times material by the SEC to be participants in a massive Ponzi scheme, and the SEC, which has a mandate to protect the public interest, in this case had both the authority and the duty to put an end to this scheme. But for the negligent acts and omissions, misconduct, and breaches of duty by Spencer Barasch, a former SEC regional Enforcement Director, the negligent supervision of Barasch by his SEC supervisors, and other inexcusable acts of negligence by SEC employees, the plaintiffs would not have made, and lost, their SIBL investments, as the following facts, and admissions by the SEC, show.

The entire suit filed at the Earle Cabell, which includes a recap of the 2010 report, follows.
Stanford Investors v USA

Stanford Investors v USA

SIBL Investors Might Not See Money Any Time Soon

Former Stanford International Bank Limited (SIBL) investors might have to wait in a long line of people who will have first bite of the proceeds of the assets recovery process now underway.

This was the sentiment expressed by Attorney General Justin Simon in an interview with Fox Business, casting doubts that the investors will be repaid when assets are sold in Antigua & Barbuda.

Simon said US receiver of the SIBL Ralph Janvey was only concerned about the assets of the international bank.

“That entity is only the owner of three parcels of land. Most of the lands there are in the name of Stanford Development Company and various other entities which he formed here. In fact, on record here, he has about 23 local companies, not all of them are commercial enterprises,” the attorney general said.

“…A lot of them are simply holding land, but let me make it very abundantly clear that we do not seize lands. The constitution of Antigua & Barbuda provides that the government can compulsory acquire. It also makes provision that compensation must be paid to the former owners of the land and we intend on dealing with it on that basis.”

Despite the billions of dollars that have passed through Stanford’s hands, there are predictions that only a small fraction of that money will ever be recovered.

Whatever the amount, Simon says there will be very large claims coming in from a wide range of people, including the obvious receiver’s fee.

“Mr Stanford has left a substantial amount of debt in Antigua,” Simon said. “There are trade creditors, monies owed to our utility company, APUA in respect of electricity, telephone and that sort of thing.

“There are also the 450 employees who have been severed but severance has not yet been paid to them.”

He also said that the government was very conscious of the financial obligations left behind and it would make every effort to ensure that those various claims are satisfied in addition to the claims of various investors and depositors.

Simon said that according to law, severance payments are first and then government utilities. Creditors and former customers would then be paid in priority decided by the receivers who are recovering money and selling assets.

The value of the land being sold is also in dispute.

US investigators claimed Stanford and his accountants routinely inflated the book value to conceal the true worth of his enterprises.

After Stanford’s arrest in June this year, for his alleged involvement in a US$8 billion Ponzi scheme, investors have been claiming up to US$24 billion in damages from Antigua & Barbuda, but they are still awaiting permission from the court in the US to proceed with the suit.

Former head of the Financial Service Regulatory Commission Leroy King, who is implicated in the scheme, is currently awaiting extradition to the US to face charges.

King is accused of conducting fraudulent audits and examinations of the bank’s books in exchange for financial bribes and gifts.

He was granted bail in the amount of $500,000, with a $100,000 bond to facilitate his release. In addition to surrendering his travel documents to the court and two sureties, he has been placed on house arrest and must be accompanied by one of his sureties once he leaves his home.