A federal judge has cleared the way for victims of Allen Stanford's $7 billion Ponzi scheme to receive a first interim distribution amounting to 1% of their estimated losses. United States District Judge David C. Godbey approved the distribution plan proposed by Ralph Janvey, the receiver appointed to marshal and recover assets for Stanford's victims. Under Janvey's plan, a total distribution of $55 million will be made to approximately 17,000 claimants holding collective claims exceeding $5 billion. According to Janvey's attorney, “We will follow it up in a subsequent distribution as the money comes in."
Janvey originally sought approval for a claims process back in November 2011, reporting that the Receivership had $114.5 million of cash on hand and $96.6 million in assets, and estimating that nearly $1 billion of external assets could potentially be recovered for the benefit of victims. The court approved the proposed claims process in May 2012, and established September 1, 2012 as the deadline by which victims had to submit proof of claim forms detailing their losses. In January 2013, Janvey proposed his distribution plan, explaining that he had received over 30,000 investor claims with net investor losses of approximately $5.13 billion. With Judge Godbey's approval, victims can expect to receive a distribution check within 90 days of the date of the order.
Stanford was convicted of running the second-largest Ponzi scheme in history, and was sentenced to 110 years in prison in June 2012.