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Receiver Seeks Stanford’s Alleged Ponzi Money

DALLAS (CN) - A court-appointed receiver charged with cleaning up the Stanford International Bank's alleged $7 billion Ponzi scheme has sued investors who allegedly took out $93.5 million more from Stanford's "fraudulent" CDs than they put in. He wants the money back.

Ralph Janvey, who was appointed receiver after the Securities and Exchange Commission put the brakes on the scheme in 2009, sued the investors in Federal Court, so he can distribute the money to "the more than 20,000 investors who have thus far received little or nothing from their investment in Stanford CDs."

"When [R. Allen] Stanford made purported CD principal and interest payments to the Stanford investors, he did no more than take money out of other investors' pockets and put it into the hands of the Stanford investors," Janvey says. The "CD proceeds ... are little more than stolen money and do not belong to the Stanford investors who received such funds but belong, instead, to the Receivership Estate."

All of the bank's financial statements and investment income were "fictional," Janvey says, and served only to spur unsuspecting investors into paying for Stanford's "lavish lifestyle," including jets, a yacht, luxury cars and homes.

"CD proceeds from the Ponzi scheme were transferred by the Stanford defendants to the Stanford investors solely for the purpose of concealing and perpetuating the fraudulent scheme," Janvey says. "Such CD proceeds were paid to the Stanford investors from funds supplied by other investors who bought the fraudulent CDs."

The Stanford investors received CD proceeds ranging in amounts from approximately $63,000 to more than $14 million, Janey says. The total payouts came to more than $538 million.

But "the money the Stanford investors received was not their money, was not a return on their investments, and was not generated by any of [Stanford's] other business ventures," the receiver says.

Janvey says the money "must be returned ... to compensate victims of the Stanford fraud according to principles of law and equity."

Janvey is represented by Kevin Sadler with Baker Botts in Austin.

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