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Wednesday, 27 February 2013

KLS Update February 2013


Dear Stanford Clients:

This update is in response to the questions and concerns of many of our clients regarding the
Receiver’s proposed interim distribution, as well as several other matters.

The Receiver’s Proposed Distribution

You may have received a notice indicating that you must complete a certification form within six weeks. However, the six week time period does not begin until after the Court approves the Receiver’s request to make an interim distribution. As soon as the Court approves the request, then you will have six weeks to complete the certification form. For many of you, we will be completing these requirements on your behalf. We do not anticipate the Court approving the request for several months. Several objections have been filed in opposition to the distribution, and there may be more objections filed within the next few weeks. These objections were filed by various parties, mostly defendants in lawsuits brought by the Receiver, claiming that they should be included in the distribution. It will take several weeks, if not months, for the Court to resolve these objections. We will keep you updated on this process and notify you as soon as the Court enters a ruling on the proposed distribution plan.

The February 14, 2013 Discovery Hearing in the SEC Class Action

We continue to vigorously prosecute the case against the Government for the SEC’s failure to take enforcement action against the Ponzi scheme. As we mentioned in past updates, the Government filed a second motion to dismiss the Complaint, raising new arguments that it had not previously raised. We filed a strong opposition to the motion, and the issues are now fully briefed and awaiting a ruling from the Court. We have also been moving forward with discovery and we filed a motion to compel the Government to disclose more information. The Government filed a motion seeking a stay on discovery until after the Court rules on the motion to dismiss.


The Court set a hearing on these motions on February 14, and we traveled to Miami, Florida last week to attend and argue at the hearing.

We are happy to report that the Court denied the Government’s motion to stay discovery. The Court ruled that the Government will have to begin responding to discovery in this case and cannot completely obstruct the process by staying discovery altogether. The Court also ruled on our motion to compel discovery by compelling the Government to produce certain preliminary information and requiring the Government to produce a witness to testify at a deposition regarding the allegations of our Complaint. We look forward to taking this deposition and will continue to update you regarding the status of this case.

The Antiguan Claim Process

As our SFA clients know, the Antiguan Liquidator set up a claim process and we submitted claims to the Liquidator on behalf of all of our SFA clients. At the time we submitted those claims, the Liquidator had not yet set up a deadline for submission of the claims. However, now the Liquidator has set a March 31, 2013 deadline. We encourage our non-SFA clients to review the procedure for submitting claims and make sure you submit your claims before the deadline. If any of you want to become SFA clients so that we can complete the process on your behalf, please do not hesitate to contact us. More information about the claims’ process requirements can be found at:

http://www.sibliquidation.com/claims-administration/

As always, if you have any questions or comments, please feel free to contact us.

For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/ 

The Stanford International Victims Group Forum




Tuesday, 19 February 2013

Stanford Investors Sue Antigua, Caribbean Central Bank

By Laurel Brubaker Calkins (Bloomberg)

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).





For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/ 

The Stanford International Victims Group Forum


Friday, 15 February 2013

Notice to Prove issued by Antigua Joint Liquidators


Notice to Prove
Stanford International Bank Limited – In Liquidation


We anticipate an interim dividend is to be declared to unsecured creditors in the above matter within two months. All creditors should ensure they have submitted their proof of debt in the liquidation by 31 March 2012. Information with respect to completing your proof of debt can be found on the liquidation website at www.sibliquidation.com.

Creditors who have not lodged a proof of debt by 31 March 2013 may be excluded from this dividend.

DATED THIS 14 of FEBRUARY 2013

For and on behalf of Stanford International Bank Limited

Marcus Wide and Hugh Dickson
Joint Liquidators



For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/ 

The Stanford International Victims Group Forum

Thursday, 14 February 2013

Executives convicted for helping with Allen Stanford's Ponzi scheme each sentenced to 20 years in prison

HOUSTON — A judge in Texas has sentenced the last two defendants convicted for helping disgraced financier R. Allen Stanford bilk investors out of more than $7 billion in one of the biggest Ponzi schemes in US history.

Gilbert Lopez Jr., the ex-chief accounting officer for one of Stanford's companies, and Mark Kuhrt, the global controller, were each sentenced to 20 years in prison during a hearing Thursday in Houston federal court.

Attorneys for Lopez and Kuhrt had asked for lesser prison terms, saying their clients were not as culpable as two other former executives who were given significantly smaller sentences.
Prosecutors say Lopez and Kuhrt helped hide Stanford's misuse of investor funds. Stanford was convicted last year on 13 fraud-related counts and sentenced to 110 years in prison.


For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/ 

The Stanford International Victims Group Forum


Wednesday, 6 February 2013

Court Frustrate SIB Liquidators



Antigua St. John's - Stanford liquidators have issued a statement following a recently court judgement that found, among other things, that Barbara Streete is not a valid director of the Stanford Development Company (SDC).

A statement issued to Caribarena on Tuesday is reprinted in full below, followed by feedback from SDC attorney Hugh Marshall.

“At first pass it seems that the Court found that the Sun building was leased under market. However, when the judgment is read more closely the Court stops short of finding the lease of the Sun was under market.

The Court also found that SDC had and has no properly appointed Board of Directors. The Court also commented that Ms. Stoelker had no authority to act on behalf of SDC.

The Court went on to specifically find that Barbara Street is not a Director of SDC and directed that she cease and desist from holding herself out as one.

The consequence of this ruling, as noted by the Court, is that no one had the authority to enter into the various sales and leases proposed by SDC.

We also note that while the Court refers to SIB’s claim of $5.6million, the Court did note that SIB had additional claims.

SIB asserted that in fact SDC benefitted from SIB in an amount in excess of $269 million at the expense of the creditors of SIB which is well in excess of the value of the assets of SDC today.

While the Court suggests that SIB has not progressed its claims against SDC, this is attributable to the fact that the Joint Liquidators have not yet been able to obtain a hearing on the substantial issues of our claim.

In the meantime as the Joint Liquidators of SIB we remain frustrated as we watch the attempts to deal with the assets of SDC at undervalue and while having to deal with maneuvers to prevent us from taking those assets into possession to be dealt with properly for the benefit of the creditors of SIB who paid for them.”

SDC attorney Hugh Marshall Jr, who is currently out of state, said he was unaware of a court ruling concerning the former Antigua Sun building, but was aware of a judgment that regarding Streete.

Marshall said reactive legal steps have since been taken to fix the problem. He declined to comment on the Sun building.



For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/ 

The Stanford International Victims Group Forum


Tuesday, 5 February 2013

AG Hints at Receivers’ Real Estate Interest




Antigua St. John's - Minister of Legal Affairs Attorney General Justin Simon has said Antigua & Barbuda’s biggest concern in the ongoing Stanford Investment Bank liquidation process should be real estate that could be targeted by court-appointed receiver Ralph Janvey.
The AG tabled the notion in response to Caribarena’s queries about the possibility of Janvey turning his attention to attorneys in Antigua & Barbuda associated with R Allen Stanford.

Janvey has initiated legal action against an attorney in Texas and two law firms he was affiliated, alleging that he aided in the US$7 billion Ponzi Scheme by obstructing initial federal investigations into Stanford’s operations several years ago.

“The Stanford Investment Bank Limited (SIBL) receivers are primarily concerned with tracing assets to pay off investors and are of the view that the Stanford Development Company properties were purchased from SIBL monies,” the attorney general said.

He added that control of these properties is his primary concern, with what appears to be a strategic approach currently in action.

“This thing is open and the action strategic,” the AG said, declining to be more specific about persons or attorneys of interest at this time. “We could not be more specific. I will not point a finger at anyone.”

On Sunday, a spokesperson for the Stanford Victims Group took the same stance, also declining to comment specifically on any particular personality that might be in the spotlight.


For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/

The Stanford International Victims Group Forum

Monday, 4 February 2013

Stanford Lawyer Culpable



Antigua St. John's - Ralph Janvey, the court appointed received for Stanford assets in the United States, has launched a ‪query‬ against a former Stanford attorney and two law firms suing them over claims they aided the $7 billion Ponzi scheme.
And the Stanford Victims Group has used the platform to remind the courts here in Antigua to consider similar actions.

Janvey filed the application last Friday in a Dallas Federal Court, accusing Thomas Sjoblom, the lawyer, and Proskauer Rose LLP, where Sjoblom was a partner from 2006 to 2009, and Chadbourne & Parke LLP, where Sjoblom was a partner from 2002 to 2006, of aiding and abetting Stanford’s fraudulent scheme, according to a Bloomberg news report.

R. Allen Stanford was convicted to serve 110-years in prison in March 2012 of stealing more than US$2 billion from depositors at his bank based here in Antigua. And for using the funds to finance a lavish personal lifestyle that included private jets, yachts and mansions.

According to news report, the attorney in question allegedly joined a “conspiracy” in the summer of 2005 at Stanford’s headquarters in Houston, Texas, to allegedly obstruct a U.S. Securities Exchange Commission investigation into the Ponzi scheme.

“Sjoblom, who had 20 years of experience as a senior lawyer in the SEC’s Enforcement Division, spent the next four years delaying and obstructing the investigation by lying to the SEC,” Janvey said.

Caribarena sought a comment on the matter from Attorney General Justin Simon, specifically looking for insights on whether or not similar suites could be repeated against Stanford’s attorneys here in Antigua. But the AG declined to comment.

A spokesperson from the Stanford International Victims group has however announced that the victims were pleased to see that some of the people who (allegedly) sold their integrity and honesty to Allen Stanford for the sake of making a fast dollar are now in the firing line of the receiver Ralph Janvey.

“The courts in the US and Antigua need to show that no matter whoever you are or wherever you are from, no one is above the law. These people are accused of making lots of money off the backs of the victims by turning a blind eye and therefore allowing and assisting Stanford to carry out his massive Ponzi scheme. If they are guilty then they assumed the risk and as lawyers they should know more than anyone that crime does not pay,” the spokesperson said.

In the meantime, the receiver is accusing the lawyer of falsely stating that he had personally confirmed Stanford Financial wasn’t a Ponzi scheme, instructing Stanford Financial to hide documents from the SEC, misrepresenting the existence and nature of the SEC’s investigation to Stanford Group Co.’s auditors, and offering false testimony to the SEC.





For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/

The Stanford International Victims Group Forum

Saturday, 2 February 2013

The District Court Rules in Favor of the Receiver in His Claim to Recover Net Winnings Paid to Stanford "Net Winner" Investors

On January 23, 2013, the District Court entered a summary judgment order in favor of the Receiver finding that the Receiver is entitled to recover from Stanford investors any funds they were paid in excess of the principal they deposited in the Stanford fraud scheme. The Court ruled that the net winner investors' contracts with Stanford are void and unenforceable and that the investors did not provide value for amounts they received from Stanford in excess of the amounts they deposited. As a result, the Court held that that allowing the net winner investors "to keep their fraudulent above-market returns in addition to their principal would simply further victimize the true Stanford victims, whose money paid the fraudulent interest." Although the District Court's order is not a final judgment, the District Court certified the order for appeal, which means that it will likely be appealed in the near future to the US Court of Appeals for the Fifth Circuit.

The Receiver is pleased with the Court's ruling today that those investors who profited from the Stanford ponzi scheme do not have the right to retain those profits. This decision represents an important milestone in the very long and difficult process of unwinding the massive Stanford ponzi scheme. In his ruling, Judge Godbey agreed with the Receiver's position that the fictitious interest payments that Stanford made to investors on their Stanford International Bank certificates of deposit simply represented money taken from one set of investors and paid to another; it was just part of Stanford's efforts that kept the ponzi scheme going for well over a decade.

Based on his investigation, the Receiver identified over $220 million in net winnings or fictitious interest that was paid to over 800 investors. The Receiver intends to use this ruling to pursue recovery of these funds for the benefit of the thousands of investors who sustained significant losses on their Stanford CDs. Once recovered, these funds can be distributed to the victims of the Stanford fraud, which would be in addition to the $55 million that the Receiver has already proposed for distribution. Click here to view the Order.

The Receiver is continuing to pursue recovery through litigation of other funds that can be distributed to victims, and he continues to work cooperatively with the U.S. Department of Justice and the Antiguan-appointed Liquidators to reach a final agreement to make available for distribution approximately $300 million in funds and assets currently frozen in foreign countries.




For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/

The Stanford International Victims Group Forum

Friday, 1 February 2013

Allen Stanford Lawyer Sued by Receiver for Aiding Fraud

By Edvard Pettersson & Thomas Korosec (Bloomberg)


A lawyer who worked for convicted financier R. Allen Stanford and two law firms that employed the attorney were sued by the receiver for Stanford’s business over claims they aided his Ponzi scheme.

The court-appointed receiver, Ralph Janvey, filed a complaint yesterday in federal court in Dallas. He accuses Thomas Sjoblom, the lawyer, and Proskauer Rose LLP, where Sjoblom was a partner from 2006 to 2009, and Chadbourne & Parke LLP, where Sjoblom was a partner from 2002 to 2006, of aiding and abetting Stanford’s fraudulent scheme.

Stanford, 62, was convicted in March of stealing more than $2 billion from depositors at his Antigua bank to finance a lavish personal lifestyle that included private jets, yachts and mansions. He is serving a 110-year term in a federal prison in Florida as he appeals his conviction and sentence.
Sjoblom, in the summer of 2005, joined a conspiracy at Houston-based Stanford Financial to obstruct a U.S. Securities Exchange Commission investigation into the Ponzi scheme, according to Janvey’s complaint.

“Sjoblom, who had 20 years of experience as a senior lawyer in the SEC’s Enforcement Division, spent the next four years delaying and obstructing the investigation by lying to the SEC,” Janvey said.

Receiver’s Allegations

The receiver accuses the lawyer of falsely stating that he had personally confirmed Stanford Financial wasn’t a Ponzi scheme, instructing Stanford Financial to hide documents from the SEC, misrepresenting the existence and nature of the SEC’s investigation to Stanford Group Co.’s auditors, and offering false testimony to the SEC.

Sjoblom didn’t immediately respond to an e-mail after regular business hours yesterday seeking comment on the lawsuit.

Nick Clark, a spokesman for Proskauer, had no immediate comment, and Andrew Blum, a Chadbourne spokesman, didn’t immediately return a call seeking comment on the lawsuit after regular business hours.

The case is Janvey v. Proskauer, 13-00477, U.S. District Court, Northern District of Texas (Dallas).




For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/

The Stanford International Victims Group Forum