Allen Stanford’s Girlfriend Stoelker Sued by Receiver for Wages, Payments

Stanford’s girlfriend, Andrea M. Stoelker, was sued by the indicted financier’s court- appointed receiver for $560,000 that she received in wages and other payments from the Stanford Financial Group of companies.

Stoelker’s services, including her work on Stanford’s Caribbean cricket subsidiary, were of no value to creditors, said Kevin Sadler, lead attorney for Stanford receiver Ralph Janvey, in papers filed today in federal court in Dallas.

“Any services performed by Stoelker were designed to further the operations of the Ponzi scheme and may well have assisted Stanford in attracting new victim investors,’’ Sadler said in the filing.

Stoelker, who is identified by Sadler as Stanford’s “girlfriend and/or fiancée,’’ said in her own court filings that she often accompanied Stanford on international business trips and Las Vegas vacations. She also sought, and was denied, the return of her personal belongings taken from Stanford’s yacht when his assets were frozen by court order and turned over to Janvey in February 2009.

Stanford is in federal prison in Houston awaiting a January trial on charges that he swindled investors of more than $7 billion through allegedly bogus certificates of deposit issued by Antigua-based Stanford International Bank Ltd.

Mansions, Jets, Yachts

Stanford faces parallel civil fraud allegations from the U.S. Securities and Exchange Commission, which claims he skimmed more than $1 billion in investor funds to finance a lavish lifestyle that included multiple mansions, a fleet of jets, two yachts and a private island. Stanford has denied wrongdoing.

Stoelker was “unjustly enriched’’ while serving as president of both Stanford Financial Group Global Management LLC and Stanford 20/20, according to the lawsuit. The 20/20 organization promoted a faster version of cricket, which the financier hoped would attract a wider following to the sport. Stoelker received at least $140,000 from the cricket unit and another $180,000 from Stanford personally, Janvey claims.

Stoelker previously attended many of Stanford’s court appearances. She was refused court permission to visit Stanford in prison.

The case is Janvey v. Stoelker, 3:10-cv-01272, U.S. District Court, Northern District of Texas (Dallas).

What Does HSBC Have to HIDE?

I have been looking into the actions of HSBC who were instrumental in transferring money from UK and European bank accounts to Stanford International Bank in Antigua. From the information given by the forensic accountant Karyl Van Tassel of FTI Consulting and the wire instructions for transferring my money to Stanford International Bank in Antigua it became clear that something was seriously wrong.

I contacted HSBC and asked for proof that my money was indeed transferred to Stanford International Bank in Antigua, I new they would not be able to provide this because of the report by Karyl Van Tassel. I was immediately told since I did not have a bank account with HSBC they would not talk to me, I then spoke to the Banking Ombudsman who told me I would have to go through my bank where the money was originally transferred from.

After many months of discussions with Barclay’s Bank and calling HSBC’s bluff by paying the 50 GB pounds that HSBC demanded to provide proof the money was sent to Stanford International Bank in Antigua, I again met with a brick wall. Barclay’s were told by HSBC that they refused to release the information without a Court Order. Barclay’s were as astounded by the behaviour of HSBC as I was, these are not the actions of a bank that has nothing to hide!

I then consulted a lawyer, one who incidentally had won a case against HSBC recently involving wire transfers. He kindly took a preliminary look at my evidence and said he thought I had a good case against the bank. The bad news is the banking ombudsman will not help since I did not bank with HSBC, and the lawyer said unless I had limitless cash to throw at the case HSBC could draw out the case until I ran out of money. It could cost me tens of thousands of pounds just to get a court order to force them to release details of where the money was transferred to.

This is unbelievably and unjust, that a bank like HSBC can refuse to disclose what it did with a persons money and unless you are rich you will have no recourse for justice. How can I, an old age pensioner who has lost her life savings fight for justice against a Bank like HSBC?

I will outline below my case against HSBC perhaps a politician or an investigative reporter will help me find justice.

Stanford was first investigated 20 years ago when he became a subject of a joint Scotland Yard-FBI investigation into so-called “brass-plate” banks on the Caribbean island of Montserrat. The investigation was set up after the tiny island, with a population of fewer than 13,000 people, had been targeted by criminals who set up more than 300 banks and rapidly found itself at the centre of a worldwide money laundering operation. Among them was the Guardian International Bank, created by Allen Stanford. The bank was suspected of laundering drug money from the notorious Medellin and Cali drug cartels run by Pablo Escobar and the Orejuela brothers, according to former FBI agent Ross Gaffney, who headed the task force set up to investigate the suspicious explosion of offshore banks on the island. Before the investigation could develop further, Stanford was forced to surrender his Montserrat banking license by the British Government and left the island only to open Stanford International Bank in Antigua, who despite Stanford being a declared bankrupt in the United States and warnings from the FBI and Scotland Yard was granted a banking license.

American forensic accountant Karyl Van Tassel of FTI Consulting published a report for the SEC stating that none of the money investors pumped into Stanford International Bank (SIB) actually went to Antigua & Barbuda where the bank was based. Karyl Van Tassel, who was hired by the court-appointed receiver in the Securities Exchange Commission (SEC) civil case against Sir Allen Stanford, said the money went instead to Stanford company accounts at banks in the United States and Canada. Van Tassel found that between January 1, 2008 and February 17 this year, US $2.1 billion in deposits money went to Toronto Dominion Bank in Canada, another US $624 million went to Trustmark National Bank, which is based in Mississippi, and US $801 million went to the Bank of Houston.

Having looked at the money laundering regulations introduced throughout the European Economic Area (EEA) in 2007 which were passed into British law as Statutory Instrument 2007 number 2157, there are a couple of points to be noted:

The regulations state: A credit institution (“the correspondent”) which has or proposes to have a correspondent banking relationship with a respondent institution (“the respondent”) from a non-EEA state must—(a) gather sufficient information about the respondent to understand fully the nature of its business; (b) determine from publicly-available information the reputation of the respondent and the quality of its supervision. As I pointed out earlier Alan Stanford’s Guardian International Bank situated on Montserrat was being investigated by Scotland Yard and the FBI for money laundering which would usually undermine one’s ‘reputation’ in banking. Further SIB was audited by an unknown auditor.

The regulations also state: A credit institution must not enter into, or continue, a correspondent banking relationship with a shell bank….A “shell bank” means a credit institution, or an institution engaged in equivalent activities, incorporated in a jurisdiction in which it has no physical presence involving meaningful decision-making and management, and which is not part of a financial conglomerate or third-country financial conglomerate. As I pointed out earlier a forensic audit proved money was never sent to Antigua but diverted to US and Canadian banks indicating that the mind and management of SIB was not in Antigua. Further SIB was not part of Stanford Financial Group. It was an affiliate.

While there is little doubt that the subtleties of the Stanford situation have only come to light after the US Securities and Exchange Commission’s freeze on all Stanford assets, the UK government were aware that this “bank” was being monitored and were in fact monitoring SIB themselves. Barclays and HSBC are enormous banks with many more resources to hand than individual investors. Further, agreeing to be a correspondent bank for all Euro transactions with a bank outside of the EEA should add an additional responsibility to undertake thorough due diligence given the ability to transfer funds freely within the EU and EEA.

How was it possible for HSBC to have become the correspondent bank for all Sterling and Euro deposits given the exercise of due diligence expected from correspondent banking with offshore entities and the history that Allen Stanford had with the British banking authorities.

The Foreign and Commonwealth Office comments to the recent BBC Panorama programme on Alan Stanford said that the ‘UK government does take financial malpractice very seriously and issues regular advice on countries and jurisdictions where there may be serious deficiencies in regulation. It is for companies and the financial professionals they employ to act on this advice with all due diligence’. Presumably, the last part of this comment would apply Barclays and HSBC.

My instructions for the transfer of money was from Barclays to HSBC Bank in London Swift code MIDLGB22XXX For further credit to Stanford International Bank in Antigua (Sort Code 40-05-15) Account Number 58180160 Swift Code (SIBP AG AG) For final transfer to Mrs XXXXX Account Number 161xxx.

The money never reached Antigua but was transferred by HSBC to their bank in the Cayman Islands. The sort code given of 40-05-15 with the Swift code for SIB in Antigua (SIBP AG AG)is actually nothing to do with Stanford but is HSBC in the Cayman Islands. The misrepresentation of the sort code being part of Stanford International Bank along side the swift code should have raised alarm bells with HSBC had they were practiced “due diligence”. Where the money went from HSBC in the Cayman islands remains a mystery, but from the behaviour of HSBC they clearly know it was not sent as per my instructions to Antigua.

I hope HSBC are proud of their actions, and I would like the world to know how this bank has behaved towards a retired victim and many others who have lost their life savings possibly as a result of the actions of HSBC.

Stanford’s Co-Defendants Try to Flee the ‘Circus’

Just like you don’t get to pick your family, defendants accused of being members of a conspiracy have to live with one another, even though that means a jury may lump them together in deciding their guilt. Executives from the Stanford Financial Group charged with participating in a multibillion-dollar Ponzi scheme are learning this lesson as they deal with what one described in a legal brief as the “circus” surrounding their co-defendant, R. Allen Stanford, the firm’s founder.

White-collar crime prosecutions usually involve multiple defendants, and a conspiracy charge is often at the heart of the case. That charge means a single trial involving all the defendants, even though they may have differing levels of culpability and one may be the lightning rod in the case.

Laura Pendergest-Holt, former chief investment officer at Stanford Financial, filed a motion last week asking to have her trial severed from her co-defendant because of what she called the “egregious and circus-like conduct” created by Mr. Stanford and his current lead counsel. Indeed, her brief uses the word “circus” no fewer than eight times in describing what has taken place in court.

Two other co-defendants, the firm’s former chief accounting officer and its controller, have joined her severance motion, trying to put as much distance as they can between their trials and Mr. Stanford’s.

Under Federal Rule of Criminal Procedure 8(b), prosecutors can charge defendants in a single indictment if they participated “in the same series of acts or transactions.” A conspiracy charge is the typical means for bringing different defendants together into a single case because it can be such a wide-ranging offense, sometimes covering years of conduct. So long as the government shows there is a reasonable basis to believe each defendant participated in the criminal agreement, they can be tried together.

There are many dangers to defendants in a joint trial, the most significant being the potential “spillover effect” from the evidence showing the culpability of other members of the conspiracy. Under conspiracy law, the acts of each accused conspirator can be used against all the other accused members.

Especially when one defendant is controversial, jurors may focus on that person and view the others as simply trailing the leader’s wake. Once convinced of the primary defendant’s guilt, it is easy for a jury to conclude that the others should be convicted.

A co-conspirator can seek to have the trial severed from other defendants under Rule 14(a) if a joint trial “appears to prejudice” the person. Of course, prejudice does not mean just that the jury is more likely to convict if they are tried together, so a defendant asking for a severance has the burden of showing significant problems that would call into doubt whether the person could receive a fair trial.

Mr. Stanford’s defense has been rather disorganized to this point, and his conduct in court has not gone over well with Judge David Hittner in Federal District Court in Houston, who is presiding over the criminal case. The Wall Street Journal recently noted that 10 different law firms had represented Mr. Stanford since the Securities and Exchange Commission first filed civil fraud charges in February 2009 accusing Stanford Financial of operating a Ponzi scheme.

Unfortunately for Ms. Pendergest-Holt and her co-defendants, the actions of Mr. Stanford may not be enough to have their case separated from his. Judges have a strong preference for conducting a single trial when the bulk of the evidence will be the same for each defendant.

There is a much stronger case for granting the severance motions in the insider trading prosecution of Raj Rajaratnam, the billionaire founder of the Galleon Group hedge fund, and Danielle Chiesi, his indicted co-conspirator. In that case, the government contends there were seven different conspiracies to trade on information in different companies from a variety of sources, but only one conspiracy charge accuses both defendants of agreeing to trade on inside information. There is significantly less overlap in the Galleon case, so they have a better chance of winning their motions.

In the Stanford prosecution, all of the defendants are named in the primary conspiracy, mail fraud and wire fraud counts, and there appears to be a significant overlap in the evidence against them. Ms. Pendergest-Holt is also named along with Mr. Stanford in additional counts alleging obstruction of justice, an even greater confluence of the evidence that will be used against them at trial.

The government is likely to strongly oppose the severance motion because it does not want to expose its witnesses, particularly the former chief financial officer of Stanford Financial, who is cooperating in the case, to multiple court appearances to testify.

Even when there is overlapping evidence, judges are more sympathetic to a severance motion when it appears that a joint trial puts the defendants in the position of offering antagonistic defenses, such as when each blames the other for pulling the trigger.

The conflict described in Ms. Pendergest-Holt’s brief between Mr. Stanford and his co-defendants appears to focus more on how his conduct makes it difficult to trust how he will act at trial and less on what their actual defenses to the charges will be.

While Ms. Pendergest-Holt and her co-defendants may try to shift as much blame as possible on to Mr. Stanford, that could require them to testify in order to point the finger at him. That is always dangerous because the jury could perceive them as taking the easy way out once they were caught and conclude that they all acted together.

Even when there is blame-shifting among the defendants, courts usually reject a request for separate trials and instead rely on jury instructions that the evidence against each must be weighed separately. Whether that keeps a jury from lumping the whole group together is an open question.

It is often the case that defendants in white-collar crime prosecutions cooperate on their defense and even enter into a joint defense agreement in order to present a united front. That is certainly not the case here, as Mr. Pendergest-Holt and her co-defendants want to avoid having Mr. Stanford dominate the trial and, if he chooses to testify, come across poorly to a jury.

While a joint trial would certainly make it more difficult for the other defendants to avoid the taint of being linked to Mr. Stanford, this is not the type of prejudice under Rule 14(a) likely to lead separate trials involving the same core of evidence. Judges do not want to listen to the same evidence all over again when the case can be tried once, even if that comes at the cost of putting antagonists together at the defense table.

Vantis warns it may have to stop trading

Accountancy group Vantis may itself face corporate restructuring or insolvency after its board flagged up uncertainty that the firm can continue trading, leading its shares to be suspended from the junior market.

Trouble at the firm, which specialises in corporate restructuring and insolvency, hinges on a massive unpaid fees bill from its work on Stanford International Bank, as well as the impact of the recession on its business advisory and tax arm.

Chief executive Paul Jackson and head of corporate restructuring Nigel Hamilton-Smith, who worked on Vantis’s most high-profile case, the liquidation of alleged Ponzi schemer Allen Stanford’s Antiguan bank, resigned from the firm’s board on Saturday. They are still working for the firm on day-to-day business, Vantis said.

Vantis has yet to receive a penny of the multi-million-pound fees it is owed for its liquidation work on Stanford International Bank.

It was hit with further bad news last week when a high court judge in Antigua ordered the firm to be removed from its position as liquidator on the Stanford case after complaints from a creditor.

Vantis’s finance director, Steve Smith, is taking over “all executive responsibilities” at the firm until a new chief executive is identified, the firm said.

It added that it was still in discussions about selling “certain of the company’s assets” and talking to potential investors as well as its lenders, who include Lloyds TSB, Barclays and Royal Bank of Scotland, about a rescue package

Update relating to recent decision by the Court of Antigua re: Stanford International Bank Ltd – in Liquidation (SIB)

The Joint Liquidators of SIB, Mr Nigel Hamilton-Smith and Mr Peter Wastell, were appointed by the Financial Services Regulatory Commission of Antigua and Barbuda as Joint Receivers, and subsequently Joint Liquidators, of SIB on 19 February 2009.

Following a decision by the High Court of Antigua on Tuesday 8 June 2010, the Joint Liquidators wish to confirm that the Court has decided that they should be removed from office and alternative liquidators appointed. As at the date of this release, a written judgment has not been handed down by the Antiguan Court.

The Joint Liquidators have been advised by their legal counsel that the basis of the decision, which has as yet only been given orally by the Judge, was incorrect and that it should be urgently appealed to the Eastern Caribbean Court of Appeal.

Since their appointment, the Joint Liquidators have continued to make significant progress in their efforts to recover monies on behalf of the creditors and investors of SIB and, as recently as 7 June 2010, were recognised by the Swiss Financial Regulator as the officers to whom control of the SIB assets in Switzerland, totalling in excess of US$100 million, should pass.

Following extensive negotiations, the Government of Antigua & Barbuda had also recently confirmed that the properties owned by SIB, which the Government had made moves to compulsorily purchase, would be released to the Joint Liquidators, as part of their ongoing efforts to obtain the maximum return for creditors.

In addition, a settlement agreement between the Joint Liquidators and the United States Receiver was reached in late May 2010, which sought to bring to a conclusion the legal challenges that have taken place between them in relation to the assets of SIB that are located in Antigua, the United States, the United Kingdom and Canada.

The Joint Liquidators wish to confirm that they will request a stay in the High Court decision pending their appeal to the Eastern Caribbean Court of Appeal to enable them to remain in office. The Joint Liquidators remain focused on recovering the assets of SIB for creditors. All SIB investors who have not yet registered their claim on the Online Claims Management System should do so via the website at https://stanford.vantisplc.com/, where their claims will continue to be processed.