DALLAS (CN) – A Dallas federal jury Wednesday told the court-appointed receiver for R. Allen Stanford’s $7 billion international Ponzi scheme that he could not take $88 million from billionaire investor and film producer Gary Magness.
The seven-member jury unanimously concluded that Magness’ investment entities acted in good faith when they took out $88 million in loans from a Stanford affiliated bank in October 2008.
The jurors found the defendants had notice that Stanford’s certificate of deposit investment scheme may have been a fraud and failed to investigate, but that investigation would have been futile.
“An investigation would be futile if a diligent inquiry would not have revealed to a reasonable person that Stanford was running a Ponzi scheme,” the jury charge stated. “To establish futility the Magness parties are not required to prove that they actually conducted a diligent inquiry.”
Magness is chairman of Denver-based Magness Investment Group LLC, a private holding company that manages his investment portfolio and businesses. Magness and his wife, Sarah Siegel-Magness, founded Smokewood Entertainment, the production company behind the Oscar-nominated film, “Precious: Based on the Novel Push by Sapphire.”
He also owns Magness Land & Cattle and is a significant stockholder in the cable industry, according to his website.
Receiver Ralph S. Janvey, an attorney with Krage Janvey in Dallas, sued Magness for the money in February 2015.
Janvey has filed dozens lawsuits to claw back money investors lost to Stanford’s Ponzi scheme. Defendants have included the Miami Heat basketball team, New Orleans-based law firm Adams & Reese, Baton Rouge-based law firm Breazeale Sachse & Wilson, the University of Miami, Texas A&M University, the PGA Tour, the ATP tennis tour, and several Stanford entity investors, members and officers.
In April last year the Texas Supreme Court rejected Janvey’s claim against The Golf Channel for $6 million a Stanford entity paid for advertising. The court concluded the advertisements had “reasonably equivalent value” under Texas law.
Stanford is serving a 110-year prison sentence.