The Official Stanford Investors Committee asked the U.S. Justice Department to repatriate $330 million frozen in indicted financier R. Allen Stanford’s foreign bank accounts as suspected criminal proceeds, even though the funds are legally controlled by Stanford’s Antiguan receiver.
Ralph Janvey, the Dallas attorney appointed as Stanford’s U.S. receiver, has been fighting a separate receiver appointed by the Antiguan government for control of the financier’s estate for nearly three years. The Antiguan receiver was awarded control by Swiss and British courts of the former billionaire’s bank accounts in those countries, while Janvey controls Stanford assets in the U.S.
Lawyers for Janvey and the Antiguan receiver told the Dallas judge in charge of the U.S. Securities and Exchange Commission’s civil fraud case against Stanford that the two receivers can’t agree how to share control of the estate or repay depositors. About 28,000 investors were allegedly defrauded of more than $7 billion through certificates of deposit sold by Stanford International Bank in Antigua.
“Millions of dollars have been spent litigating these jurisdictional issues - all at the expense of the victims,” attorney Peter Morgenstern, a member of the Stanford investors’ committee, said in a Nov. 18 letter to the Justice Department.
“The committee urges the DOJ to immediately begin the process to repatriate these funds to the U.S. for prompt distribution to all legitimate Stanford victims, regardless of citizenship or residency status,” Morgenstern said in the letter, a copy of which was provided today to Bloomberg News.
Stanford, 61, has been imprisoned as a flight risk since June 2009 on charges he defrauded investors about the security and oversight of their investments at his offshore bank. Stanford denies all wrongdoing and is in custody in a Houston federal prison awaiting trial, which hasn’t yet been scheduled.
Elizabeth Ortega, a spokeswoman for Grant Thornton, which was appointed Stanford’s Antiguan liquidator earlier this year, didn’t immediately return a request for comment on the investors’ letter.
Kevin Sadler, Janvey’s lead lawyer, declined in an e-mail today to immediately comment as he hasn’t seen the letter.
Justice Department spokeswoman Laura Sweeney had no immediate comment on the letter.
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 vs. Stanford International Bank, 09cv298, U.S. District Court, Northern District of Texas (Dallas).
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