A federal jury found that a former U.S. Ambassador to Ecuador must return more than $700,000 in compensation he received as an employee of Allen Stanford's massive $7 billion Ponzi scheme. The case brought by a court-appointed receiver against Peter Romero, of St. Michaels, Maryland, was seen as a test case for more than a dozen similar trials scheduled for 2015 and 2016 against those who received transfers from Stanford's scheme either as an employee or investor. Stanford is currently serving a 110-year prison sentence at a high-security Florida federal prison.
Romero worked at the State Department during the Clinton administration who, after leaving the State Department, subsequently signed on to work for Stanford as a consultant in the early 2000's. According to the receiver, Romero's primary role was to recruit new investors to the scheme - trading on "his prior government service to become an ambassador for Allen Stanford." Romero traveled all over the world, interacting with media outlets as well as current and potential clients. In addition to working with Stanford's marketing operations, Romero's activities included radio interviews and appearances to give speeches.
The Court-appointed receiver, Ralph Janvey. originally sued Romero in February 2011 for the return of nearly $600,000 in compensation, and subsequently amended the suit to increase the amount sought to nearly $1 million. Janvey alleged that Romero allowed Stanford to attract potential investors and curry favor with politicians by leveraging his reputation and government contacts. Janvey has also recently alleged that Romero willfully destroyed evidence of his relationship with Stanford by deleting the email account he used to communicate with Stanford in the days following the revelation of the scheme in 2009. Romero's lawyers denied Janvey's allegations, instead attempting to satisfy their affirmative defenses under TUFTA by alleging that "Romero was a good-faith transferee whose services as a member of the Stanford International Advisory Board for market-rate compensation constituted reasonably equivalent value."
Following the close of testimony, the Receiver, Ralph Janvey, submitted a Motion for Judgment as Matter of Law ("Motion for Judgment") seeking a judgment of more than $1 million: $725,000 in compensation from a Stanford entity, nearly $377,000 in investment redemptions, and almost $34,000 in expense reimbursements. While the jury decided that Romero was required to return his compensation, they did rule in his favor in deciding that he was not liable for the return of the approximately $377,000 in redeemed investments before the collapse of Stanford's scheme in 2009.
A copy of the Receiver's Motion for Judgment is below: