International Victims Charge America to play Fair
October 22, 2011
PRESS RELEASED By Kate Freeman
In 2009 on the heels of the Madoff fraud, the Ponzi scheme operated by R. Allen Stanford was uncovered
which has received widespread media coverage in the United States. What has not been widely reported
is that only 4,000 of the 21,000 victims worldwide are US citizens. The remaining 17,000, the vast
majority, are innocent victims from around the globe, who all have one common cause; to recover their
life savings, stolen by the US citizen R. Allen Stanford, under the guise of his Stanford Financial
Group, based in Houston, Texas, and regulated by the United States Securities and Exchange Commission.
It is now almost three years since R. Allen Stanford was charged with fraud and his various enterprises
wound-up and sold by the US court appointed receiver Ralph Janvey. Yet to date there has been no
distribution of any funds recovered by the receiver, nor even a mechanism created whereby those funds
can be fairly distributed equally among all the innocent victims, some of whom have lost their homes
and become ill, while others have died waiting. Meanwhile the receiver, his general counsel, Kevin
Sadler of Baker Botts, and the other advisors he has engaged are consuming all the available funds
they have collected.
Further, in the United States there has been no recognition that anyone but US voters and taxpayers
have been harmed by this massive fraud, perpetrated by a US citizen, based in Texas, where officials
of the US regulator preferred to spend their time at work watching porn instead of taking the
enforcement actions they were charged with, against a business they knew to be a fraud.
The failure of the SEC in detecting the Madoff Ponzi scheme has been well reported and investigated,
yet some of those SEC officials who missed Madoff knew as far back as 1997 that Stanford may be a
fraud. The Stanford empire was investigated by the SEC on at least four occasions, first in 1997, and
they concluded even back then it was likely a massive Ponzi scheme, yet no action was taken, as the
SEC did not think there were any American investors, consequently they permitted the fraud to continue
and grow exponentially for a further twelve years, abandoning 21,000 innocent investors to their fate,
simply because they believed it did not concern US interests. How wrong could they be, and how
prejudiced in their negligence and blatant disregard for their duties.
The SEC have been investigated for their failure to detect the Stanford fraud, and heavily criticized.
Their own Inspector General has stated that the depth of their failure is unbelievable; and US
congressmen have claimed that the debt they owe the Stanford victims is enormous, and demanded that
they should act swiftly, so families whose retirement and savings were stolen as a result of greed
and government failure can begin to rebuild their lives.
Following the investigation, earlier this year many hundreds of innocent Stanford victims worldwide
filed protective claims against the SEC for negligence under the Federal Tort Claims Act. The SEC have
had their allotted six months to respond, yet remain unconscionably silent, with no regard for the
consequences of their complicity, or the demands of elected officials.
Now the SEC finds themselves and their appointed receiver once again under investigation, for the way
they have conducted this receivership.
The Securities and Investors Protection Act was passed by congress to provide a fund to repay innocent
victims of US securities fraud, irrespective of their nationality or place of abode. It gave the
registered broker/dealers a veneer of respectability and investors the comfort of believing there was
a safety net should the worst happen and any of the US financial advisors they trusted turn out to
be liars, crooks, or thieves.
It has taken the SEC two years, under considerable political pressure, to instruct SIPC to do the
right thing, yet we now learn the number of innocent victims who believed they were eligible for
compensation may be limited further, and that SIPC themselves may raid the receivership estate, to
recover their losses at the expense of the remaining victims.
Whenever innocent foreign victims of the Stanford fraud have asked for recognition in the United
States, invariably they have been told that Stanford operated his fraud from the small Caribbean
island of Antigua, and what rights have they to expect that US authorities and officials have any
obligation or other moral duty to extend assistance. The tentacles of the Stanford empire stretched
halfway around the globe and in each of its outposts was portrayed as a safe, stable, and conservative
institution backed by a major Texas based group, regulated in the US, extending equivalent protection
to investors worldwide to that benefiting US citizens. Further, R. Allen Stanford, the founder and
sole shareholder was compared by Forbes to the likes of UBS and Wachovia, who accredited him as one
of the United States 400 wealthiest individuals, with a portfolio of $51bn under management. After
the president of the United States, George W Bush, and a raft of US senators and congressmen also
lent Stanford their endorsement, how could his credibility possibly be questioned further?
At the request of dissatisfied victims of the Stanford fraud, the courts have recently appointed two
very experienced directors of Grant Thornton as joint liquidators of Stanford International Bank, and
charged them to recover and distribute, fairly and equally, and in the shortest possible time, the
losses stemming from the Stanford Ponzi scheme. Grant Thornton have been recognized as the most proper
person to recover losses stemming from the Stanford fraud, with the best chance of success by courts
in every jurisdiction worldwide, except in the United States, where the receiver, Ralph Janvey, and
his 'official' investors committee, comprising mainly self-interested attorneys, have contrived to
establish a network of vested interests which serve primarily to benefit themselves, and through which
they have reached an agreement whereby they may charge excessive fees which may run to hundreds of
millions of dollars, all at the expense of all the innocent victims. Grant Thornton has strived
to reach a workable protocol with Janvey for the benefit the innocent victims, yet the vested interests
in the US continue to block any agreement from being reached.
There are frozen funds overseas, to the tune of $250m that Grant Thornton wish to recover and
distribute equally, transparently, and quickly, to all the Stanford victims worldwide, yet they have
been further blocked by the United States Department of Justice, who seek to 'repatriate' those
funds to the US, to be distributed; how? These are funds that did not originate from the US yet the
DOJ insists that US minority interests should once again be given preferential treatment.
The perpetrator of the fraud R. Allen Stanford still awaits trial in Texas. Unlike Madoff he has not
confessed, but pleads the fifth amendment; has changed attorneys as frequently as changing his socks;
claimed incompetence; drug addiction; and now memory loss; what next? His trial has been postponed
twice, and is now due to be heard in January 2012, meanwhile many of the initial charges have been
dropped, and there are some who believe he may soon be granted bail, and conveniently disappear.
In a recent twist many of the lawsuits that may eventually benefit the victims of this fraud, already
delayed two years due to restrictions imposed by the judge appointed by the DoJ to hear the criminal
case against Stanford; may now fail entirely, following a ruling by another judge; appointed by the
SEC to preside over the civil case, all at the expense of the innocent victims.
Enough is enough. The United States authorities and institutions have failed us all, not just US
citizens, and we all deserve to be treated equally. We have all seen our entire life savings stolen
by a US citizen who was permitted to operate for years due to the negligence of the US regulator, and
we now find US court appointed officers determined to line their pockets at the further expense of the
innocent victims, and through political pressure, place US citizens in a preferential position, while
the perpetrator of the fraud continues to mock us all.
It may not appear so to the US victims of this fraud but the world is watching just how self-interested
and how little regard some officials and citizens of the US appear to have for anyone but themselves.
All 21,000 innocent Stanford victims lost their life savings in this massive fraud. All the foreign
victims ask is to be treated with fairness, equality, and with due respect. No more humiliation and
injustice. Is it too much to ask that the officials of the world's most powerful, wealthy, and
technologically advanced nation show some integrity, accept responsibility for the consequences of
their complicity in the Stanford fraud, and make due recompense without further delay to each and
every victim regardless of class, creed or citizenship.
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