News Americas, New York, NY, October 8, 2024: Remember the infamous Robert Allen Stanford scheme that put Antigua & Barbuda in the global spotlight for all the wrong reasons? As Stanford serves a 110-year sentence in Florida’s Coleman II federal prison, victims of his company, Stanford Financial, are finally on the verge of recouping some of their losses.
Stanford, a Texas financier, was convicted for orchestrating a $7 billion Ponzi scheme through Stanford International Bank Ltd., his offshore bank on the Caribbean island of Antigua. Now, 14 years later, progress is being made for the victims.
Ralph S. Janvey, the securities lawyer appointed as receiver in the case, is distributing significant payments following a settlement reached last year. So far, Janvey has returned approximately $609 million to former Stanford customers, with an additional $157 million ready for disbursement, adding to the $1.2 billion already set aside. While this is far short of the $4.9 billion in total claims owed to over 20,000 customers worldwide, it is more than many victims ever expected to recover.
Hedge funds and other investors in distressed assets have bought about $700 million in claims, according to Baker Botts, the law firm assisting Janvey. Victims like Annalisa Mendez, who lost $400,000, noted that many desperate people sold their claims to these funds for a fraction of their value. Others, like Jean Anne Mayhall, who held on to her $500,000 claim, expressed frustration at the long wait. Many victims, including Mayhall’s mother, sold their claims after years of delays, while some died before receiving any compensation.
Although there is no public list of hedge funds that bought the claims, firms such as Contrarian Capital, Whitebox Advisors, and Farallon Capital Management are believed to be among the largest purchasers. Hedge funds typically bought these claims at 14 to 17 cents on the dollar, with prices jumping to around 35 cents after the bank settlement announcement in early 2023.
Despite frustrations over the lengthy process, the market for claims remains active. Victims of other financial scandals, including the collapse of the cryptocurrency exchange FTX and Bernie Madoff’s infamous Ponzi scheme, have similarly sold their claims. Recovery rates vary; in Madoff’s case, nearly 90% of investor losses were recovered thanks to aggressive federal prosecution and settlements with big banks.
In the Stanford case, Janvey and his legal team faced criticism from victims over the time it took and the high fees paid to lawyers, which have totaled $463 million over 15 years, with another $38 million expected soon. Victim advocate Angela Shaw Alexander described the fees as excessive, given the slow pace of restitution.
Janvey defended the process, noting that the Stanford fraud was vast and complex, requiring years of costly litigation. While federal authorities initially expected to recover at least $2 billion from Stanford’s bank in Antigua, only $63 million in cash and some assets like real estate and private equity investments were ultimately seized.
For Robert Allen Stanford, now 74 and prisoner number 35017-183, the earliest possible release date is March 13, 2103.
The news comes as European Union Tuesday removed Antigua and Barbuda from its list of non-cooperative jurisdictions for tax purposes, but kept Trinidad and Tobago and Anguilla on that list describing them as countries that do not cooperate with the EU or have not fully met their commitments.
