By Laurel Brubaker Calkins - Feb 18, 2013 8:39 PM GMT+0100
R. Allen Stanford’s receiver and investors’ committee sued Antigua, the
Eastern Caribbean Central Bank and 23 former Stanford Financial Group
Co. executives over allegations they aided the financier’s $7 billion
fraud.
The Official Stanford Investors Committee seeks repayment of at least
$90 million in documented loans Stanford made to the dual-island nation
of Antigua and Barbuda and accuses its elected officials of having been
“Stanford’s partners in crime.” The nation’s leaders shielded Stanford’s
scheme and traded choice real estate for as much as $230 million in
loans that haven’t been repaid, according to the lawsuit.
“Antigua knowingly provided necessary assistance to Stanford’s $7
billion Ponzi scheme and, in exchange, received millions of dollars in
loans whose repayment terms Stanford did not enforce,’’ the committee
said in a complaint filed in Dallas federal court on Feb. 15. “For well
over a decade, Antigua was a prime participant in, and beneficiary of,
the Stanford Ponzi scheme, and actively protected and shielded
Stanford’s criminal enterprise from real regulatory scrutiny.’’
Stanford, 62, was convicted in March of masterminding a Ponzi scheme
that defrauded investors through the sale of bogus certificates of
deposit at his Antigua-based Stanford International Bank Ltd. He is
serving a 110-year sentence in a Florida federal prison as he appeals
his verdict and sentence.
Falsified Audits
Evidence at Stanford’s trial showed he bribed Antiguan banking regulator
Leroy King to falsify audits certifying the bank’s investment returns
and mislead U.S. securities regulators investigating the former Texas
billionaire’s operations. Stanford was also allowed to underwrite and
participate in banking reform legislation that Antigua claimed had
cleaned up its corrupt offshore banking industry, according to trial
evidence. Antigua has so far failed to extradite King to face criminal
charges in the U.S.
The investors on Feb. 15 separately sued the Eastern Caribbean Central
Bank, which nationalized Stanford’s other island financial institution,
the Bank of Antigua, after the U.S. Securities and Exchange Commission
seized Stanford’s enterprise on suspicion of fraud in February 2009.
The ECCB in turn parceled out ownership in the bank to the government of
Antigua and to other Caribbean banks in what the investors called “a
second act of brazen thievery.” The head of ECCB’s monetary council at
the time was Antiguan Minister of Finance Errol Cort, who was both
King’s supervisor and one of Stanford’s personal attorneys, according to
court papers.
‘Rightful Owners’
“The considerable value of the Bank of Antigua, believed to be in the
tens or hundreds of millions of dollars, should be distributed as
compensation to its rightful owners, Stanford’s victims and creditors,’’
the committee said in court papers.
Recent comments by Antiguan elected officials indicate the country
intends to repay the bank instead of the defrauded investors, Peter D.
Morgenstern, a lawyer for the investors’ committee, wrote, meaning that
“in essence, Antigua intends to use CD investors’ money to pay itself.’’
Tom Bayko, Antigua’s attorney, didn’t immediately respond to voice or
e-mail messages seeking comment on the lawsuit. In an earlier suit,
Bayko said Antigua was protected from such litigation by foreign
sovereign immunity.
Officials at the ECCB didn’t immediately return telephone or e-mail messages seeking comment on the lawsuit.
Ralph Janvey, Stanford’s court-appointed receiver, filed another lawsuit
on Feb. 15 claiming breach of fiduciary duty lawsuit by 23 former
directors and officers of Stanford’s operations, including three
executives convicted of furthering the fraud scheme. The suit seeks
return of all compensation from these individuals, some of whom have
been previously sued by the receiver on similar claims.
“Many directors and officers simply looked the other way, while others
actively assisted Stanford in defrauding thousands of people out of
billions of dollars,’’ Kevin Sadler, Janvey’s lead lawyer, said in the
filing in Dallas federal court. They “put their continued employment and
substantial compensation ahead of the best interests of the entities
they were hired to serve,” he said.
The cases are The Official Stanford Investors Committee v. Antigua and
Barbuda, 3:13-cv-0760; The Official Stanford Investors Committee v. Bank
of Antigua, 3:13-cv-0762; Janvey v. Alvarado, 3:13-cv-0775. All are in
U.S. District Court, Northern District of Texas (Dallas).
The main criminal case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston).
Read more: http://sivg.org/article/2013_Stanford_Investors_Sue_Antigua_Caribbean_Central_Bank.html
For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/
