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Florida Business, Whistleblower, & Securities Lawyers / Blog / Ponzi Scheme / Stanford Ponzi Scheme Receiver and Liquidators agree to distribute $300 Million to Defrauded Investors

Stanford Ponzi Scheme Receiver and Liquidators agree to distribute $300 Million to Defrauded Investors

Attorney Ralph Janvey, the U.S. receiver of Stanford Financial Group, and accountants Marcus Wide and Hugh Dickinson, international liquidators of Stanford International Bank Ltd. (the “Bank”), have agreed to distribute up to $300 million of the Bank’s assets that have been frozen since regulators uncovered Stanford’s decade-long Ponzi scheme that defrauded investors of more than seven billion dollars.

The agreement, facilitated in large part by the U.S. Justice Department, follows years of litigation between the two sides over control of the Bank’s assets. After state and federal regulators uncovered the Ponzi scheme in 2009, the High Court of Antigua – exercising its jurisdiction over the Antiguan-based Bank – appointed Nigel Hamilton-Smith and Peter Wastell of the now-defunct accounting firm Vantis, Plc to oversee the liquidation of the Bank’s assets. At the same time, the United States Federal District Court in Dallas appointed Janvey the receiver to the U.S.-based Stanford Financial Group. Because Stanford’s Ponzi scheme centered on fraudulent certificates of deposit (CDs) issued by the Bank, both sides sought to control the Bank’s assets. Hamilton-Smith and Wastell were concerned, however, that foreign account holders who invested in the Bank’s fraudulent CDs would face difficulty filing claims if the Bank’s assets were left solely in the discretion of Janvey and the U.S. Justice Department. After Hamilton-Smith and Wastell were removed from their position, the Eastern Caribbean High Court at Antigua appointed Wide and Dickinson to oversee the Bank’s liquidation.

Now, the two sides have agreed to allow Wide and Dickinson to distribute ninety percent of the Bank’s frozen assets held in the UK, Canada, and Switzerland. Both courts in Antigua and Dallas have approved the agreement, but the parties have not yet disclosed when the defrauded investors will begin receiving checks, because many of the Bank’s assets remain tied to illiquid holdings like real estate.

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