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$50 Million Coming to Stanford Ponzi Victims

DALLAS (CN) - The receiver for Allen Stanford's $7 billion Ponzi scheme has $50 million to pay to fraud victims after settling lawsuits against Stanford's attorneys and accountants.

Court-appointed receiver Ralph Janvey filed a motion for approval of a distribution plan on Feb. 12 in Federal Court. If approved, the distributions will be the third such payments since 2013.

More than $29.8 million will come from a settlement Janvey reached with accounting giant BDO USA. The Official Stanford Investors Committee sued BDO in 2012, claiming the auditor knowingly participated in the certificate of deposit investment fraud .

"Despite the pervasive fraud that infected Stanford Financial Group's operations, BDO USA repeatedly issued unqualified audit opinions on its Stanford clients' annual financial statements," the complaint stated. "BDO USA's audit opinions on SGC's financial statements were critical to Stanford Financial Group's success."

BDO settled the lawsuit in 2015, agreeing to pay $40 million . At the time, it was the largest amount awarded to Stanford Ponzi victims. More than $9.9 million in attorneys' fees were included in that settlement.

New Orleans-based law firm Adams and Reese and Baton Rouge-based law firm Sachse & Wilson agreed to pay $3.6 million for the latest distribution. Janvey sued those law firms and several of their attorneys in 2012, accusing them of sending false opinions to authorities and referring clients to Stanford in exchange for benefits.

Janvey said the law firms "embarked on their own campaign to enrich themselves at their other clients' expense," and that while providing legal services to Stanford Financial they referred their own clients to Stanford.

"Many of these clients purchased SIBL CDs," the complaint stated. "Through these referrals, the two firms curried favor with their powerful new client, Stanford Financial, while enjoying the lucrative legal work that Stanford Financial sent the firms to reward them for adding to Stanford Financial's bottom line. Of course, the law firms' efforts to help Stanford Financial sell more SIBL CDs did not go unnoticed at Stanford Financial."

The law firms settled the claims for $5 million last year, which included $1.2 million in attorneys' fees.

Janvey said the remaining $16.5 million will be distributed from other receivership assets. He plans to make the payments "on a rolling basis" to victims when the distribution plan is approved by the court.

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