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Saturday
Oct152011

Judge to Stanford Receiver: Stop Looking for Pot of Gold and Start Repaying Investors

“When the U.S. Justice Department has already checked and there’s no pot of gold, then the receiver can stand down,”

- United States District Judge Godbey

The federal judge overseeing the court-appointed receiver tasked with recovering assets of R. Allen Stanford's alleged $7 billion Ponzi scheme recently expressed his desire to see a claims process initiated for the repayment of assets recovered thus far to victims.  Additionally, U.S. District Judge David Godbey expressed concern that receiver Ralph Janvey may be depleting funds that could potentially be distributed to victims by duplicating efforts of the United States Department of Justice, which is also investigating Stanford as it continues to work towards putting Stanford on trial in early 2012. 

As covered by Ponzitracker here, calls have been growing from Stanford victims that Janvey's ongoing crusade to recover assets for victims have accomplished little and instead continue to build the amount of fees paid to Janvey for his efforts.  This concern was echoed by Judge Godbey at a hearing Thursday, who stated he was "concerned the receiver is expending resources that could otherwise be distributed to investors trying to track down missing resources.”  The frustration comes from the search thus far for assets related to Stanford's alleged $7 billion fraud; to date, Janvey and his legal team have recovered approximately $100 million in unrestricted cash.  The Receiver has liquidated nearly all of the saleable assets under its control, and is currently in negotiations with liquidators in Antigua and Barbados to determine the best course to take with Stanford's island properties there.  Additionally, Janvey and his team have filed more than 100 "clawback" lawsuits, which, if successful, could add up to $500 million to that total.  According to Kevin Sadler, the lead attorney representing Mr. Janvey, "we've sued everyone we can find."

Judge Godbey cited the ongoing efforts by U.S. prosecutors, who have won asset freezes on more than $300 million in Stanford-related bank accounts abroad.  Those funds are outside the reach of Janvey's duties, and could possibly be returned to victims through the process of remission, as recently seen in the AdSurfDaily Ponzi scheme and detailed on Ponzitracker here.  Judge Godbey has asked for a plan entailing what it would take to wrap up the search for Stanford's assets and what the initiation of a claims process for investors would cost.   

Previous Ponzitracker coverage of the Stanford Ponzi scheme is here.

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