A Double Robbery Without Guns

Since I first posted the article FROM A NEWSPAPER entitled “A ROBBERY WITHOUT GUNS I have had a torrent of abusive emails from Angela Shaw to such a degree that I told her not to email me any more and blocked her from my email system.

It would seem that telling her I wanted nothing to do with her and would not reply to her abuse was not enough for Ms Shaw and today I noticed that she has started to post even more abuse, this time on Stanfords Forgotten Victims blog. I am not going to go down to her level and even bother to reply to her nasty comments and have removed her posting, and I will continue to remove any more postings she puts on there. I would like to apologize to all readers of the blog for this persons behaviour and for trying to spoil what has been a source of information to Stanford victims. It would appear that Ms Shaw has some kind of fixation with me and seems to hold me personally responsible for the bad light others see her in. The blog will continue and I will continue to print any and all articles I find that are of any interest to the Stanford Victims, whether they say complimentary things about Ms Shaw or not. If any readers find a posting on the blog from her, please let me know so that I can remove it. Many thanks.

Below is the article taken from a newspaper.

Things have not gotten any better lately for the majority of investors in the failed Stanford Bank, at least not for those who are not US citizens, who are by far the majority.

First the Antiguan receivers managed to get themselves fired, and have not yet been replaced. Then the US Receiver dodged a motion for bankruptcy, which would not only have significantly curtailed his billing, but would have greatly expedited payments to the victims.

Instead, the Judge who appointed him established an investors committee, ostensibly so the victims of the fraud could be represented in the receivership.

Regrettably, the Examiner who chairs the committee allowed it to get hijacked by the lawyers acting on the class-actions, and a couple of American investors, fronting the Stanford Victims Coalition (SVC), claiming to represent all the victims, but whose sole stated intent (now they are appointed) is to gain SIPC coverage for a minority of mainly US citizens.

Once the remaining investors started to raise questions, and began to realise that any SIPC pay-out could well be at their expense, they were ceremonially dumped, and branded anarchists or radicals.

The leader of the SVC now states that she is only representing the Americans and is going out of her way to thwart any attempts by the international investors to gain any information, and is also trying to close down the Stanford Victims forum which is used by the international investors to share news and comments.

A double whammy for the international investors; first, the failure of the SEC in America to act, knowing for 13 years Stanford was likely a Ponzi Scheme; the reason they gave for not acting was because they simply did not think there were any US investors.

Then, the International Investors were abandoned by the very people (SVC) who asked them to help fight for justice, just as soon as they could see a way to their own personal recovery. The SVC know that if they are successful in getting SIPC cover, all the receivership assets may be claimed to subsidise their pay-out and this would leave the majority of International Investors with nothing!!

Only in the United States of America could this be allowed to happen… robbed once by Stanford and then robbed again by the very people (the SVC) who misled so many into believing they were working to help them.


New Official Committee to Represent Victims Interests Announced


March 30, 2010


CONTACT: Peter Morgenstern (pmorgenstern@mfbnyc.com), 212-750-6776

Kevin Sadler (kevin.sadler@bakerbotts.com), 512-322-2589
Dallas, Texas – Ralph Janvey, the Court-appointed Receiver in the Securities and Exchange Commission’s civil enforcement action against R. Allen Stanford, today announced, together with Peter D. Morgenstern, an attorney representing victims of the alleged $7.2 billion Stanford Financial Group “Ponzi” scheme, that they have reached an agreement to resolve a pending motion seeking to force the Stanford entities into bankruptcy, by establishing an official committee to represent the victims’ interests in the continuing receivership case.
The agreement, submitted as a proposed stipulation and order to Judge David Godbey of the United States District Court for the Northern District of Texas, who is presiding over the case has the support of the SEC, John J. Little, the Court-appointed Examiner, and the Stanford Victims Coalition. Under the terms of the agreement, a formal committee would be established to represent the interests of investors who purchased certificates of deposit (CDs) from Antigua-based Stanford International Bank, Ltd. Among other things, the agreement provides a framework that allows the Receiver and the Committee to coordinate and cooperate in several important areas, including providing access to the Committee to review Stanford records that are under the control of the Receiver and pursuing litigation against third parties. The agreement also provides for regular consultations between the Receiver and the Committee on a variety of issues of importance to the Stanford Receivership.
The agreement, if approved by the Court, would resolve long running dispute over whether investors should have the right to file an involuntary bankruptcy petition against Allen Stanford and one or more of the Stanford companies and have a formal role in the receivership proceedings. In a court hearing last month, the investors argued that a bankruptcy filing would afford them greater rights to participate in the identification and liquidation of Stanford’s assets, and to pursue claims against third parties that may have helped perpetrate the fraud. The Receiver and the SEC opposed that request, arguing that a bankruptcy filing would be disruptive and expensive.
“This agreement recognizes the legitimate rights of Stanford’s thousands of victims to participate in the receivership process, including the pursuit of assets and lawsuits aimed at recovering funds to at least partially satisfy their multi-billion dollar claims,” said Mr. Morgenstern. “We have essentially obtained all of the benefits of a bankruptcy filing for the victims while accommodating the Receiver’s legitimate concerns about the potential difficulties that such a filing would pose. We are hopeful that this agreement represents a turning point in the case, ushering in a new phase characterized by a cooperative effort by the Receiver and investors to maximize recoveries for the thousands of Stanford victims worldwide.”
Ralph Janvey, the Stanford Receiver said that the agreement “is in the best interests of the Receivership Estate and will allow both the Receiver and the Committee to work together to provide the greatest return possible to those injured by the Stanford fraud.”
Angela Shaw, founder and director of the Stanford Victims Coalition, an international advocacy group representing victims of the alleged fraud, supports the agreement and would serve as a member of the newly-formed Committee. Mr. Little has also agreed to serve on the Committee, whose other members would be designated once the Court approves the agreement.
The case is Securities and Exchange Commission v. Stanford International Bank, Ltd., Civil Action No. 3:09-CV-00298-N, United States District Court, Northern District of Texas (Dallas).

Judge mulls bankruptcy for Stanford fraud case

A Dallas federal judge is considering whether to continue a receivership searching for $7.2 billion in investments alleged to have been stolen by jailed promoter Robert Allen Stanford, of Houston.

U.S. District Judge David C. Godbey said last month that he may turn the case over to a bankruptcy court.

The issue is important to hundreds of residents in the Baton Rouge, Lafayette and Covington areas because as much as $1 billion of their money vanished last year when federal authorities shut down Stanford’s worldwide operations.

Across the globe, more than 25,000 investors lost money to Stanford, 60, who has remained in federal custody since June. He is scheduled for trial in January.

Investors and attorneys are divided as to whether bankruptcy would provide more money to devastated victims than the receivership.

Jean Anne Mayhall, of Folsom, is a partner in a small business. She saw the firm’s pension plan lose more than $1 million in the Stanford collapse.

Mayhall said Friday that moving the Stanford receivership into bankruptcy possibly could help defrauded investors persuade the Securities Investor Protection Corp. to cover some of their losses.

Although SIPC has provided more than $500 million to victims of convicted fraud artist Bernard Madoff, of New York, the broker-dealer-funded non-profit has refused to help Stanford victims.

“The very first rule is that the (Stanford) companies must be liquidated,” Mayhall said, adding that placement of the Stanford firms into bankruptcy would be the first step toward liquidation.

Once in bankruptcy, Mayhall said, SIPC possibly could be persuaded to cover losses up to $500,000 per individual account.

Blaine Smith, of Baton Rouge, agreed. Smith lost about $1.5 million in retirement savings to Stanford.

“Bankruptcy court is where they should have gone in the first place,” Smith said.

But Phillip W. Preis, a Baton Rouge attorney for more than 100 Stanford victims, said Friday that transfer of the case to bankruptcy court would cost investors more of their salvaged funds. And, he added, the move probably would not persuade SIPC officials to extend coverage to the Stanford case.

“I don’t see it happening,” Preis said.

Preis said SIPC helped Madoff victims because their money was never invested in anything. Madoff just pocketed investors’ cash and sent them phony earnings statements.

Stanford invested his clients’ money, but lied about the kinds of investments that he made and the thefts that he allegedly committed, Preis said.

The kinds of frauds Stanford is accused of committing are much more common than that of Madoff, Preis said. So, opening the door to that type of coverage would bankrupt SIPC, he said.

In Dallas, Godbey has listened to additional arguments, a transcript of a recent court hearing shows.

Attorneys for the Securities and Exchange Commission and the court-appointed receiver, as well as an examiner representing the interests of all investors, asked Godbey not to throw the case into bankruptcy. All argued that such action would further drain assets recovered by the receiver for investors.

But Gregory A. Blue, a New York attorney representing hundreds of Stanford victims, argued that bankruptcy proceedings could be no more expensive than the receivership team put together by Dallas attorney Ralph S. Janvey.

Since the receivership was established 13 months ago, Janvey has recovered less than $200 million while billing the receivership estate for more than $40 million in fees and expenses, court records show.

“Bankruptcy is not the magic bullet,” Kevin Sadler, an attorney for Janvey, told the judge. “Bankruptcy, I believe, would lead to serious delay, serious costs, and deplete the (receivership) estate.”

Janvey then received support from one of his most vocal critics — Dallas attorney John J. Little, the court-appointed examiner representing the interests of Stanford victims.

“Let me just say, from the investors’ viewpoint, if this were a popular vote, the receiver (Janvey) would lose,” said Little, who repeatedly has criticized Janvey’s efforts as too expensive.

But Little added: “I can’t convince myself that moving to bankruptcy will somehow make life better for the investors at the end of the day.”

Blue then said Little should be replaced by a creditors’ committee if the case remains in receivership.

Blue told Godbey that various investor groups disagree as to whether the case should continue in receivership or be moved to bankruptcy court.

The disagreements are too serious for one person to handle, Blue added.

An example, Blue said, is the divide between the majority of investors who lost most or all of their savings, and several hundred who were lucky enough to recover all of their money before the SEC closed Stanford down.

Last year, Janvey twice attempted to claw back nearly $900 million from the innocent winners over the opposition of the SEC.

Janvey wanted to distribute the winners’ money among all the Stanford investors. But Godbey and the 5th U.S. Circuit Court of Appeals ruled against him.

“There are winners and losers in the clawback,” Blue told Godbey. “The people who are the losers on that undoubtedly would want to see the money clawed back. The people who are winners don’t.”

Bankruptcy rules are different from those for federal district courts, so Preis was asked Friday whether a transfer to bankruptcy court could re-open the clawback issue.

“A ruling of the 5th Circuit is binding,” Preis said. “That would be binding against the bankruptcy trustee just like it was against Janvey in his receivership.”

Godbey took the matter under study last month. A check of court records Saturday showed that the judge had not yet ruled on the issue.

Stanford Victims Want Receiver in Antigua Ousted

Investor Alex Fundora feels like he’s been forgotten as court-appointed receivers fight over the scraps of R. Allen’s Stanford’s fallen $7 billion financial empire.

The Miami man lost $2.7 million on certificates of deposit — money he thought was safe — when government regulators in Antigua and Dallas took over Stanford’s operations, accusing him of running a Ponzi scheme.

Fundora filed an amended affidavit Feb. 17 asking the Eastern Caribbean Supreme Court of Antigua and Barbuda to remove an accounting company liquidating Stanford International Bank, saying London-based Vantis is in over its head and in jeopardy of going bankrupt itself.

But Fundora doesn’t stop there. He finds fault with the U.S. receiver, Dallas attorney Ralph Janvey of Krage & Janvey, who is generating $1.1 million in fees a month. Janvey plans to sue Stanford depositors who lost money, and a federal class action case in Miami alleges the U.S. receiver has ignored depositors who created trust funds.

“My biggest problem is I’m a victim,” Fundora said in an interview. “Everyone who was a depositor was a victim, and we are being re-vicitimized. It seems like everyone is having a feast at our expense.”

His affidavit filed in the Antigua bankruptcy case sums up the growing discontent with Vantis and Janvey among Stanford’s alleged victims. Fundora urges the Antigua court to replace Vantis’ Nigel Hamilton-Smith and Peter Wastell as bankruptcy liquidators with Marcus A. Wide of PriceWaterhouse Canada.

Wide has done 35 Caribbean bank liquidations, said Fundora’s attorney, Ed Davis of Astigarraga Davis in Miami. Wide “is a master of the Caribbean. They (Hamilton-Smith and Wastell) are complete neophytes, and they have proven it over and over again in this liquidation.”

Fundora is the face leading about 100 investors who claim a total of $70 million in losses in Antigua-based Stanford International Bank and want Vantis to be removed. The thrust of their argument is the accounting firm Ernst & Young has issued a “going-concern warning” regarding Vantis’ continued financial viability.

Davis blames Vantis’ financial difficulties on its decision to pay $11 million to contractors who worked on the bankruptcy rather than wait for court approval of a fee application.

“Another mistake,” he said.

Elsewhere, a Quebec Superior Court judge said Vantis’ application to be named foreign receiver for Canadian investors was riddled with untruths and misrepresentations. As a result, the court named Janvey the official representative for Stanford’s Canadian customers, finding that Vantis destroyed computer servers with information about Stanford Canadian accounts.

Superior Court Justice Claude Auclair said he was removing Vantis as representative “because of the absence of good faith and of respect towards the Canadian public interest, represented by the court and the regulatory authorities.”

But back on its home turf in London, Vantis got the upper hand on Janvey in a court ruling Thursday from the British Court of Appeal, which ruled the Antigua liquidators are the recognized foreign representatives of Stanford International Bank.

“This is a big, big blow to Janvey,” Davis said. “Janvey lost hands down.”

Janvey’s Web site for victims of Stanford’s alleged fraud said he disagrees with the decision as well as its finding that Stanford International Bank’s “center of main interest” is in the Caribbean country and not the United States.

“The court’s conclusion is wrong because the U.S. receivership clearly is an insolvency proceeding,” Janvey said on the Web site. Stanford International Bank “is dramatically insolvent. It is being liquidated for the benefit of creditors.”

What is worrisome to creditors is that a faltering Vantis may negotiate with Janvey and “give away rights that would be beneficial to the victims in order to keep its position,” Davis said.

Jeffrey Schneider, a partner with Levine Kellogg Lehman Schneider & Grossman in Miami, said it’s not unusual for receiverships in different jurisdictions to fight for turf.

“Turf wars accomplish nothing other than exponentially increasing the fees of the professionals,” said Schneider, who has frequently served as a receiver. “Victims’ recovery certainly aren’t enhanced under those circumstances.”

Fundora sees all this posturing by receivers as draining Stanford’s assets. He said Vantis and Janvey’s “burn rate” is insulting to victims of the alleged fraud.

Janvey angered Stanford victims last summer when he requested $20 million in fees. Earlier this month, the U.S. Bankruptcy Court in Dallas approved another $8.8 million in fees for Janvey, and he estimated he is spending about $1.1 million each month in search of remaining assets.

In a highly unusual move, the Securities and Exchange Commission, which recommended Janvey for the job, opposed his initial fee request.

“Having the SEC object to the receiver’s fees is very uncommon,” Schneider said. “Janvey should be sharing his fee applications with the SEC before his is filing them.”

Janvey, who did not return phone calls for comment, has taken plenty of heat from Stanford clients. Here’s just one item from a bulletin board on the Web site Frauds and Victims: “Janvey will go down in history as the worst receiver ever appointed by the SEC and in American Ponzi history. Most of the receivers get back between 40 percent and 85 percent. He could not even get 1 percent, but he charged 33 percent over his miserable findings.”

The post is signed “Was a calm cool investor.”

Luis Delgado, a partner with Homer Bonner in Miami, represents plaintiffs in a class action suit filed in Miami federal court on behalf of Stanford trust depositors who claim they lost more than $200 million. He said Janvey has blatantly ignored his frustrated clients.

“They don’t understand why Janvey and Vantis aren’t working together and why we have two parties generating fees,” he said.

Delgado contends Janvey is going after lost causes by suing net losers, former Stanford customers who may have earned some interest but ended up losing money when the bank went belly-up. The SEC has asked him to drop such lawsuits.

“I don’t understand this receiver going after a lot of the same people he is supposed to be protecting,” Delgado said. “I think it’s a waste of time and waste of the estates’ assets.”

An examiner appointed in the SEC case to advocate for Stanford investors said Janvey has not explained adequately why he needs to use so many professionals. Intervenor examiner John Little, a partner with Little Pedersen Fankhauser in Dallas, said Janvey’s fee requests suggest “the substantial possibility that the whole of the receiver estate could end up, not in the hands of the victimized investors, but in the pockets of the receiver and the firms he has retained,” according to a court filing in August.

But it’s noteworthy that both Little and the SEC signed off on Janvey’s latest $8.8 million fee request. Either way, the turf war is far from over. The Dallas bankruptcy judge has yet to decide who is the top receiver in Stanford. People who claim they lost money to Stanford can’t even ask to remove Janvey because he serves at the behest of the SEC.

“They basically ate the roast and left the drippings,” Davis said. “This case is a poster child on how you shouldn’t do a multi-jurisdictional international asset recovery.”