Six years and three months have passed since Stanford’s debacle destroyed the lives of 21,739 innocent families around the world when on February 17, 2009, the U.S. Securities and Exchange Commission (“SEC”) abruptly seized Stanford Financial Group in the United States.
The largest group is Latin American families with 15,270 victims representing 70% of the total depositors in the Stanford International Bank, Ltd. (“SIBL”) and more than $4 billion in losses. Depositors from the United States are the second largest group. These families entrusted their savings to a company belonging to an American conglomerate regulated and supervised by the U.S. Government.
The majority of Stanford’s depositors are modest people; many are elderly, ill, close to retirement, or families with special needs children. All are unable to pay for their critical medical treatments and living expenses. A great number continue to die while waiting in vain for even a small portion of their savings to be returned in time for life-saving operations, or treatment of cancer, and other life-threatening diseases.
The reality is that injustice continues for these victims as the U.S. Receiver for the Stanford Financial Group and the Joint Liquidators for SIBL in Antigua insatiably persist in generating fees and expenses for themselves, their attorneys, and other professionals, the sole beneficiaries so far, charging millions of dollars.
The U.S. Receiver, Ralph Janvey has “recovered” approximately $240.9 million as of December 31, 2013, and spent more than $127.5 million in fees and expenses. Mr. Janvey’s accomplishments in the recollection of assets for the depositor’s distribution fund have been lacking. According to Examiner John Little, “The Receiver and his professionals have not identified any significant Stanford assets or accounts that were not identified in the earliest days of the Receivership.” In contrast, Irving Picard, the trustee unwinding Bernard Madoff’s fraud has recovered more than $10.6 billion for victims. That is 60% of the $17 billion in principal lost by thousands of investors in Madoff’s investment advisory business.
We request that the US Receiver and the Stanford Investors Committee show us the real picture of all the litigation claims brought to the Court. What is the actual potential amount of recovery of all the domestic litigation listed in the joint report? What law suits are moving forward and which are not? What about any international litigation and the amounts sought for recovery? If the best chances that affected families have of a meaningful recovery are the law suits against the largest corporations that benefited from Stanford, why are the Receiver, his attorneys and the Official Stanford Investors Committee’s attorneys reaching settlements for pennies?
Who are the real beneficiaries of the settlement agreement between the U.S. Receiver and the Joint Liquidators? Who are the beneficiaries of the recent lawsuit settlements?
According to the Joint Liquidators’ statement on the SIB Liquidation’s website, they were named on May 12, 2011, and their mission is “to recover $7 billion in losses stemming from the alleged R. Allen Stanford multi-billion dollar Ponzi scheme and return the money to approximately 22,000 creditors in the shortest time possible.” However, it seems that the only beneficiaries are Mr. Wide, Mr. Dickson and their colleagues, who are receiving millions of dollars in fees and expenses, lining their own pockets at an alarming rate. The Joint Liquidators fifth report filed with the Court shows that they have received $8.2 million in fees and expenses so far; their lead counsel $11.6 million, other legal advisers $14 million, $5.6 million was spent for other operational expenses, and $2.2 million was given in loans to Stanford affiliates. Last year, the JLs announced the distribution of $34.6 million, equivalent to 1%, of which they have distributed $6.9 million, and withheld $25 million from innocent victims accused of receiving preferential payments.
We have not seen any meaningful efforts towards a real recovery for the victims; the Joint Liquidators are just using the money confiscated in England and Switzerland to pay themselves and their colleagues, while forcing victims through a gauntlet for a pittance. However, their latest accomplishment is an attempt to claw back funds from innocent victims who are “Net Losers” by sending a very damaging letter asking for the return of money withdrawn from their accounts during the six months prior to the collapse of SIBL. It is important to emphasize that the withdrawals made by the majority of these depositors during the six months prior to the closing of SIBL’s operations were not “preference” payments as alleged, but legitimate withdrawals of part of the principal invested by the rightful owners of the money which they deposited and withdrew at the bank during the ordinary course of business. The Joint Liquidators’ insistence on pursuing claw backs against innocent investors with as low as $1,200 in withdrawals is supported by neither logic nor law.
What honest and transparent legal entity is providing oversight of the receivership and liquidation processes? Where are the checks and balances?
We exhort the Official Stanford Investors Committee, which represents all Stanford investors’ interests worldwide, to voice our outcry and concerns expressed in this letter to the Courts and other authorities responsible for the Stanford Case. You have a fiduciary duty to the Stanford’s victims, and your decisions and actions must be carried out in consideration of the best interests of the victims. It is time that the victims of this atrocity are taken into account.
It is unacceptable that the Courts in the United States and Antigua have allowed the U.S. Receiver and the Joint Liquidators, named to conserve, hold, manage, and prevent the waste and squandering of the creditors’ patrimony, and return the money to the innocent families, to continue prolonging the recovery of assets for so long, and allow meager settlements generating endless unreasonable billable hours and expenses, to the detriment of Stanford’s depositors.
We ask for clarity, transparency, integrity and fairness, and an end to a self-serving economic interest that irrationally pursues control over the assets, wasting what is recovered of our patrimony. Control of the money cannot be the driving force to bring justice and equity to thousands of innocent families left in poverty and desperation.
We demand that U.S. and Antiguan Courts show the world, with concrete and immediate actions, their commitment to honesty, equality and justice. Innocent families in the US, Latin America, and around the world, have the right to a full restitution of their savings.
In God we trust that the rights of the victims will prevail over judicial manipulations, and that good conscience will be the instrument to impart justice, and to stop a never-ending fraud.
On behalf of COViSAL
For Justice and Restitution