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Friday
Jul082011

Stanford Investors Accuse Receiver of Collecting Nearly All Money Recovered As Fees

Ralph Janvey, the court-appointed receiver tasked with dismantling the alleged multi-billion dollar scheme perpetrated by R. Allen Stanford, today faced an unlikely threat: the investors for whom he has been seeking to recover assets.  In a motion filed in Texas federal court Friday, a group of investors claimed that Janvey's expenses to date amounted to nearly all of the assets recovered thus far as a result of Stanford's fraud.

Several investors filed a motion to intervene on July 7, making several startling accusations.  First, it states that out of the $120 million collected thus far to date by Janvey, nearly all - $118.2 million - has been paid to Janvey and his legal team as expenses, leaving just $1.5 million available to investors.  This includes allegations that Janvey billed $20 million in his first eight weeks as Receiver, and $46 million during the first year of the receivership.  Additionally, the investors allege that not one distribution has been made to investors since Janvey's appointment.  As if the amount itself was not enough, the motion breaks down each investor's pro rata share of that $1.5 million - approximately $71.42 per investor.  

But that's not all.  The motion further alleges that the Stanford Investors Committee - the court-installed group responsible for overseeing the Receiver's actions - had made an arrangement with the receiver to  receiver 25% of all recoveries from the multitude of fraudulent transfer lawsuits filed on behalf of the Receivership estate.

Ultimately, the investors seek the appointment of a representative to the Stanford Investors Committee to represent the rights of over 500 investors who had accounts with Stanford.  There has been no response from the Receiver.  Stanford is set to stand trial in January.  

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