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Allen Stanford’s Ponzi scheme recovery tops $1 billion By Reuters


© Reuters. FILE PHOTO – Allen Stanford smiling as he waits for his turn to enter Houston’s Federal Courthouse on March 6, 2012. REUTERS/Richard Carson/File Photo

By Jonathan Stempel

(Reuters) – A court-appointed receiver has recouped more than $1 billion for victims of Texas financier Allen Stanford’s Ponzi scheme, the largest by dollar amount other than Bernard Madoff’s fraud, the receiver’s lawyers said on Monday.

After years of litigation, Ralph Janvey was appointed receiver of Stanford Financial Group and received $65 Million from the June 2016 settlement between Lloyd’s of London and Stanford Financial Group.

Janvey plans to release the money in the first quarter 2022. On April 29, Janvey had been granted court permission to distribute approximately $550m and distributed $443m.

After being convicted in 2012 for operating a Ponzi scheme worth $7.2 Billion that affected approximately 18,000 investors, Stanford is currently serving 110 years of a 110 year sentence.

According to the prosecution, Stanford used his high-yielding deposits through Antigua’s Stanford International Bank to invest in risky projects and finance a luxurious lifestyle.

This fraud was exposed in February 2009. It lasted for about 20 years.

Janvey’s Baker Botts partner Kevin Sadler said that when the receivership began, the receiver only found $63million in a bank which was supposed to hold more than $7billion. It has been more than 12 years since the receivership began, but $1 billion was a remarkable achievement.

It is possible to recover more.

Janvey defends against appeals against a $124.9million judgment against Gary Magness (Colorado billionaire).

The Official Stanford Investors Committee is also working together with Janvey on a $4 Billion lawsuit against five Stanford banks. These include HSBC (OTC) and Societe Generale.

U.S. District Judge David Godbey rejected Societe Generale and HSBC’s attempts to dismiss the case.

Madoff’s Ponzi scheme was responsible for more than $18 Billion in damages.

Madoff, who was serving a 150 year sentence in prison, died April 8th at the age of 82. In December 2008, his fraud was exposed.

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