In a lawsuit filed earlier this month, Stanford receiver Ralph Janvey sought to have a federal judge determine if $55 million should be returned to defrauded investors rather than to the Libyan government. Along with the lawsuit, filed June 6, Janvey also obtained a court order freezing $55 million worth of Libyan assets in United States banks.
Recent filings have accused the Libyan Investment Authority, the investment arm of the Libyan government, of advanced knowledge of the impending crisis involving Stanford and subsequent action on that information by withdrawing funds days before Stanford's scheme would collapse. According to court filings, the Libyans withdrew $55 million between November 2008 and late-January 2009. The Securities and Exchange Commission filed civil charges against Stanford's operations weeks later on February 16, 2009.
While the lawsuit has been filed under seal in Texas federal court, Janvey's attorneys have indicated that the money should be returned for the benefit of defrauded investors because the withdrawals constituted a fraudulent transfer, governed by the Texas Uniform Fraudulent Transfer Act ("TUFTA"). Under TUFTA, an action must be brought to recover a fraudulent transfer within four years of the transfer. The judge presiding over the case has scheduled a December hearing to determine ownership of the funds. Stanford's trial was recently postponed from September to January of next year due to medical issues.