Orrin Lea Harrison III
An Addison-based coin and gold wholesaler won a take-nothing verdict in a fraud case involving ongoing Stanford litigation.
With the favorable outcome on July 10, the wholesale company, Dillon Gage, successfully fought back against a $5.1 million clawback claim. The receiver, who represents claimants who lost assets with R. Allen Stanford’s Ponzi scheme, had filed the lawsuit against Dillon Gage.
Orrin Harrison, who represents Dillon Gage, worked hard during a trial to unlink in jurors’ minds any relationship between Stanford’s Ponzi scheme and his client’s customer.
“We were able to show that our customer was not part of the Ponzi scheme,” said Harrison, of Gruber Hurst Elrod Johansen Hail Shank.
Stanford, a Houston financier behind the Ponzi scheme, was sentenced to 110 years in federal prison after his 2012 fraud conviction.
In a complaint, Ralph Janvey, the receiver for Stanford International Bank, alleged that Stanford Coins and Bullion made $5,120,155.67 in payments to Dillon Gage with the intent to hinder, delay or defraud one or more of its creditors. In addition, Janvey alleged that when Dillon Gage accepted those transfers, it had been notified that Stanford Coins and Bullion was “diverting customer money to try to stay afloat.”
In its answer and at trial, Dillon Gage denied the allegations. A pivotal jury charge instructed the jurors that a debtor’s mere intention to prefer one creditor over another did not indicate fraud.
Kevin Sadler, a partner in Baker Botts’ Palo Alto office, who represents Janvey, did not return a call for this story.
“The receiver has done a great job of shutting Stanford down and seeing fraud under every rock,” Harrison recalled telling jurors at his closing. But the dynamics between his client and Stanford Bullion and Coins were nothing more than “playing the float,” he told the panel members. He compared Dillon Gage’s customer’s action to paying off one credit card using funds available from another card.
In less than four hours of deliberations, the jurors agreed, 7-0, with Harrison’s characterization—enough at least to issue the take-nothing verdict.
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For a full and open debate on the Stanford receivership visit the Stanford International Victims Group – SIVG official Forum http://sivg.org.ag/