ECNETNews, October 8, 2024: The notorious Robert Allen Stanford Ponzi scheme, which tarnished the reputation of Antigua & Barbuda, is gaining renewed attention as victims prepare to recoup some of their substantial losses. Stanford is currently serving a 110-year sentence in a federal prison in Florida, following his conviction for orchestrating a $7 billion fraud through Stanford Financial.
Stanford’s fraudulent activities centered around Stanford International Bank Ltd., located in Antigua, leading to devastating repercussions for over 20,000 investors globally. After 14 years since the scheme’s exposure, positive developments are underway for those affected.
Ralph S. Janvey, the designated receiver, has made significant strides in distributing funds as a result of a settlement reached last year. To date, Janvey has successfully returned approximately $609 million to former clients, with an additional $157 million poised for distribution. Although this figure falls short of the total claims exceeding $4.9 billion, it represents a substantial recovery for many victims.
According to legal sources, around $700 million in claims have been purchased by hedge funds and investors focused on distressed assets. While some victims, like Annalisa Mendez, sold their claims for way less than their original value due to desperation, others, like Jean Anne Mayhall, chose to hold on to their investments, expressing frustration at the prolonged recovery process. Many individuals passed away before seeing any compensation, highlighting the emotional toll of this financial disaster.
Although a public listing of hedge fund purchasers does not exist, firms such as Contrarian Capital and Whitebox Advisors are reportedly among the largest acquirers, purchasing claims at significantly reduced rates initially, but witnessing a rise in value after the bank’s settlement announcement in early 2023.
Despite the frustrations stemming from the slow recovery timeline, the claims market remains active. Similar patterns can be observed in other financial disasters, such as the FTX collapse and Bernie Madoff’s Ponzi scheme, where claims were also sold at low values. Recovery outcomes differ; in Madoff’s case, nearly 90% of investor losses were rectified due to rigorous federal actions and settlements with major financial institutions.
Victims have voiced concerns regarding the protracted legal process and the steep fees charged by Janvey’s team, which have amassed to $463 million over 15 years, with an additional $38 million on the horizon. Angela Shaw Alexander, a victim advocate, criticized these expenses as excessive, given the slow pace of financial restitution.
Janvey, however, has defended the extensive process, emphasizing the complex nature of the Stanford fraud that required extensive litigation. Initially, federal authorities believed they could recover $2 billion from Stanford’s bank in Antigua; however, only $63 million along with various assets were ultimately seized.
Robert Allen Stanford, now 74 years old and prisoner number 35017-183, faces a scheduled release date of March 13, 2103.
In related news, the European Union recently announced the removal of Antigua and Barbuda from its list of non-cooperative jurisdictions for tax purposes, while Trinidad and Tobago and Anguilla remain on that list for failing to fully comply with EU commitments.
