Stanford Investors Sue Antigua, Caribbean Central Bank
February 18, 2013
By Laurel Brubaker Calkins
R. Allen Stanford's receiver and investors' committee sued Antigua, the Eastern Caribbean Central Bank and 23 former Stanford
Financial Group Co. executives over allegations they aided the financier's $7 billion fraud.
The Official Stanford Investors Committee seeks repayment of at least $90 million in documented loans Stanford made to the
dual-island nation of Antigua and Barbuda and accuses its elected officials of having been "Stanford's partners in crime." The
nation's leaders shielded Stanford's scheme and traded choice real estate for as much as $230 million in loans that haven't been
repaid, according to the lawsuit.
"Antigua knowingly provided necessary assistance to Stanford's $7 billion Ponzi scheme and, in exchange, received millions of
dollars in loans whose repayment terms Stanford did not enforce," the committee said in a complaint filed in Dallas federal
court on Feb. 15. "For well over a decade, Antigua was a prime participant in, and beneficiary of, the Stanford Ponzi scheme,
and actively protected and shielded Stanford's criminal enterprise from real regulatory scrutiny."
Stanford, 62, was convicted in March of masterminding a Ponzi scheme that defrauded investors through the sale of bogus
certificates of deposit at his Antigua-based Stanford International Bank Ltd. He is serving a 110-year sentence in a Florida
federal prison as he appeals his verdict and sentence.
Falsified Audits
Evidence at Stanford's trial showed he bribed Antiguan banking regulator Leroy King to falsify audits certifying the bank's
investment returns and mislead U.S. securities regulators investigating the former Texas billionaire's operations. Stanford was
also allowed to underwrite and participate in banking reform legislation that Antigua claimed had cleaned up its corrupt
offshore banking industry, according to trial evidence. Antigua has so far failed to extradite King to face criminal charges
in the U.S.
The investors on Feb. 15 separately sued the Eastern Caribbean Central Bank, which nationalized Stanford's other island financial
institution, the Bank of Antigua, after the U.S. Securities and Exchange Commission seized Stanford's enterprise on suspicion of
fraud in February 2009.
The ECCB in turn parceled out ownership in the bank to the government of Antigua and to other Caribbean banks in what the
investors called "a second act of brazen thievery." The head of ECCB's monetary council at the time was Antiguan Minister of
Finance Errol Cort, who was both King's supervisor and one of Stanford's personal attorneys, according to court papers.
Rightful Owners
"The considerable value of the Bank of Antigua, believed to be in the tens or hundreds of millions of dollars, should be
distributed as compensation to its rightful owners, Stanford's victims and creditors," the committee said in court papers.
Recent comments by Antiguan elected officials indicate the country intends to repay the bank instead of the defrauded investors,
Peter D. Morgenstern, a lawyer for the investors' committee, wrote, meaning that "in essence, Antigua intends to use CD investors'
money to pay itself."
Tom Bayko, Antigua's attorney, didn't immediately respond to voice or e-mail messages seeking comment on the lawsuit. In an
earlier suit, Bayko said Antigua was protected from such litigation by foreign sovereign immunity.
Officials at the ECCB didn't immediately return telephone or e-mail messages seeking comment on the lawsuit.
Ralph Janvey, Stanford's court-appointed receiver, filed another lawsuit on Feb. 15 claiming breach of fiduciary duty lawsuit
by 23 former directors and officers of Stanford's operations, including three executives convicted of furthering the fraud scheme.
The suit seeks return of all compensation from these individuals, some of whom have been previously sued by the receiver on
similar claims.
"Many directors and officers simply looked the other way, while others actively assisted Stanford in defrauding thousands of
people out of billions of dollars," Kevin Sadler, Janvey's lead lawyer, said in the filing in Dallas federal court. They "put
their continued employment and substantial compensation ahead of the best interests of the entities they were hired to serve,"
he said.
The cases are The Official Stanford Investors Committee v. Antigua and Barbuda, 3:13-cv-0760; The Official Stanford Investors
Committee v. Bank of Antigua, 3:13-cv-0762; Janvey v. Alvarado, 3:13-cv-0775. All are in U.S. District Court, Northern District
of Texas (Dallas).
The main criminal case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston).
READER DISCUSSION
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Showing 1 comments...
| Wasteoftime wrote on February 19, 2013 at 18:43 |
|
Antigua and Barbuda are big thieves. No way USA can force Antigua and Barbuda to pay back what is rightful for Stanford's
victims. |