Plans to control Sanford’s assets

DALLAS, Texas – United States and Antiguan-appointed receivers for disgraced Texas financier Allen Stanford’s holdings vied in court for control of Stanford’s assets as investors await payment for losses in his alleged US$7 billion Ponzi scheme. US District Judge David Godbey in Dallas heard evidence and arguments yesterday from attorneys for Ralph Janvey – whom the judge appointed almost three years ago to marshal and liquidate Stanford’s business and personal holdings – and from lawyers for executives of the global auditing firm Grant Thornton, which has been chosen by an Antiguan court for the same task. Stanford’s alleged fraud centers on certificates of deposit (CDs) sold by his Antigua-based Stanford International Bank Ltd. (SIB) to about 28,000 investors. The two Grant Thornton receivers contend that Antigua and Barbuda should be the legal center of interest. But Janvey’s lawyer, Kevin Sadler, disagree.“The last thing this receivership needs, the last thing that investors need, is two liquidators of the bank here in the US,” Sadler told Judge Godbey. “It duplicates work that has already been done.” Gregory Grossman, a lawyer for the Grant Thornton liquidators, said the claims and distributions could be coordinated between the US and Antiguan receivers. “For reasons that have been mystifying to me, we have been unable to reach a joint protocol,” he said.  Godbey didn’t make a decision at the end yesterday’s hearing, stating that he would “take this under advisement.“I’m sad to hear the mediation didn’t work,” he told the attorneys. “I’m sadder that the money going to this to pay lawyers is not going to compensate the victims.” In February 2009, the US Securities and Exchange Commission (SEC) sued Stanford, alleging that he and his employees lied about the CDs, telling investors the proceeds were invested in safe, liquid assets. Instead, the SEC charged that Stanford was spending that money to fund illiquid real estate ventures, a life of wealth and the operation of more than 130 companies, including his Houston- based broker dealer, Stanford Group Co. Later-arriving investors’ money was allegedly being used to pay off earlier investors. Stanford has been jailed as a flight risk since his June 2009 indictment by a US grand jury in Houston, Texas. Among the allegations is a claim that he bribed an Antiguan banking regulator to ignore irregularities. Stanford, who maintains his innocence, is scheduled to be tried on January 23. At a hearing this week in Houston, Texas, defence lawyers and US prosecutors are asking a judge to determine Stanford’s mental fitness to stand trial. (CMC)