The Claims Process…
Hope, Punishment or What?
An open letter from COViSAL to the Joint Liquidators
of the Stanford International Bank Limited,
Marcus Wide and Hugh Dickson
February 8, 2012
Case No. ANUHCV 2009/0149
The High Court of Justice of
Antigua and Barbuda
Dear Mr. Wide and Mr. Dickson,
We non-US citizens, victims of the fraud perpetrated by R. Allen Stanford, gathered together to defend our rights in the Coalición Víctimas de Stanford América Latina (“COViSAL”), respectfully address you to present our objections to the formal claims process that you implemented last January 18th. We request an immediate amendment of the “Proof of Debt” process and state our position on the process of liquidation of the Stanford International Bank Limited (“SIBL”) in Antigua.
Who are the Non-US Stanford’s Victims?
Of the total number of Stanford’s victims, approximately 84% are non-US citizens. Of this 84% more than 60% are victims from Latin America. The majority are modest depositors, elderly or ill in a retirement situation, and because of the loss of their savings some have already died in misery, unable to afford proper medical care.
Why did victims from Latin America purchase the
certificates of deposit (“CDs”) from the SIBL?
Latin Americans deposited their savings in the SIBL to preserve them from the unwise economic policies of their countries of origin and to ensure a dignified old age during retirement.
Mr. Marcus Wide said in the online presentation (Webinar) on October 11, 2011: “… One of the reasons people invested in Stanford International Bank was that it was not the US, it was outside the US, and to find suddenly that you are dealing with the US Government with respect to your account may be distasteful, and not what was intended by people who put money there.” Link to listen in English the paragraph mentioned above:
Link to listen to the complete first Webinar’s audio in English: http://covisal.blogspot.com/2012/02/webinar-sibl-joint-liquidators-oct-11.html
Link to the Spanish transcription of the first Webinar, elaborated by COViSAL: http://es.scribd.com/doc/80570313/
However, the reality for the Latin American victims was the opposite. The majority of Latin Americans deposited their savings in SIBL because it was one among hundreds of companies that made up the Stanford Financial Group (“SFG”), an American holding that operated in and from the United States under US regulations.
As support to these arguments, let us remember the praise from the most influential politicians of 2008, when on February 20th, of the same year, he stated the following: “I send greetings to those gathered in St. Croix, Virgin Islands to celebrate the expansion of Stanford Financial Group. To protect their future well-being and that of their families, it is important for individuals to give careful thought to strengthening their financial security. By providing investment and wealth management services, companies like yours are helping more Americans build a solid foundation for the future. Laura and I send our best wishes on this special occasion.” For these reasons, among many others, Latin American victims decided to deposit their savings in the United States.
Precedent and Objections to the Claims Process:
v On June 1, 2011, victims received the e-mail: “Stanford International Bank Limited (In Liquidation). Notice to Creditors” with the following text: “...Please note that creditors do not need to take any further action if you have previously registered your claim via the online claims management system.” Please read the text highlighted in yellow in the following Link: http://es.scribd.com/doc/80498454
However, on January 18, 2012, in the “Overview of the Claims Process” you stated the following: “Please note that all claimants of Stanford International Bank Limited must complete a claim form if they wish to receive any distributions that may be made in the future. This also applies to those claimants that have previously or intend to register their claims with the former Joint Liquidators or with the SEC Receiver in the United States.” Please read the text highlighted in yellow in the following link: http://es.scribd.com/doc/80498850
COViSAL asks: Why this contradiction? Why is the Online Claims Management System from the former Liquidators still active? Why generate this confusion that distresses the victims? Is it carelessness or what?
v A debtor-creditor relationship existed between the depositors and the SIBL, based on the Terms of Deposit and the General Conditions of the Bank. These documents constituted the agreement of the depositors with the bank, and established the rights and obligations between both parties.
However, as is evident in the claim form, the agreement of a debtor-creditor was ignored in the process of the “Proof of Debt." Unfortunately, this process was implemented without knowing how the SIBL operated and under what terms the depositors acquired their certificates of deposit (“CDs”).
For example, in the claim form (notes: 4 and 5) the Daily Compounding Method used for the calculation of the interests of the Flex CD and Fixed CD was not estimated, nor were the maturity conditions, automatic renewal or opening of a new CD.
As it is shown in the account statements, interest earned during any preceding period, but not paid to the customer, became part of the principal capital at the renovation or opening of a new CD. Only the omission of this matter makes it impossible to complete the claim form presented by the Antigua Liquidation.
Link to the SIBL’s “General Terms and Conditions”:
v According to Section 307 (b) (iii) of the International Business Corporations Act, Cap. 222 of the Laws of Antigua and Barbuda (“IBCA Act”), any creditor of the SIBL that wishes to receive any future distribution is obliged before the SIBL’s Joint Liquidators to present a written claim form with sufficient information enclosed to probe and substantiate the amount of the claim.
As it is evident in the “Account Application" forms, Stanford’s clients could request the retention of their correspondence. As an example, please read the text highlighted in yellow in the Trust Agreement (Individual Application – Single Purpose Trust Agreement). Link:
In order to hide the deception, salespersons of CDs induced their clients not to request the delivery of correspondence, citing security reasons.
In the Webinar of October 11, 2011, Mr. Hugh Dickson stated: “…We are trying to make this as simple as possible for them to file claims. We do have records, bank records that should indicate what the amounts are and who they are, and we will make this system as simple as possible for them to minimize the inconvenience.” Then, why are we, the victims, now punished with the “burden of proof”? If the majority of the victims do not even have their account statements, and you as the Joint Liquidators have stated that you have our records, why not first send us the statement balance for revision, and later formalize our claim in writing? Link to listen in English the paragraph mentioned above:
Under what Antiguan law, regulation or norm is the
method of calculation indicated in the Claim Form framed?
In April of 2009, Judge David Harris of the High Court of Justice of Antigua and Barbuda accepted the petition from the Financial Services Regulatory Commission (“FSRC”) of Antigua and Barbuda, and ordered the liquidation and dissolution of the SIBL for violation of Section 300 (1b) and (1c) of the IBCA Act. This means that SIBL failed to comply with its quarterly returns since September of 2008, and to take reasonable precautions to prevent the falsification of data on its records. In addition, they presented inconsistent statutory records to the FSRC when compared to the Bank’s private records, and in spite of these faults managed to comply with what was established in the IBCA Act presenting a certificate of Compliance by misrepresentation. Please read section 17 of the Document Claim No. ANUHCV 0126 of 2009 and Claim No. ANUHCV 2009/0149, In the Matter of an Application for the Liquidation and Dissolution of Stanford International Bank Limited and the Appointment of Liquidators in the following link: http://es.scribd.com/doc/79506579
On May 12, 2011, Judge Mario Michel of the High Court of Justice of Antigua and Barbuda, in the document Claim No. ANUHCV 2009/0149 stated the following: “This Court declares that this is a collective insolvency proceeding intended to marshal in and recover all assets and value owned by, or owed to, the Bank wheresoever in the world such assets or value may be located or realised upon. All creditors, depositors and investors in the Bank shall have the right to seek to prove in the estate of the Bank no matter where such parties are resident or located in the world. This Court finds that the Bank is insolvent and declares these proceedings to be in respect of an insolvent liquidation of the Bank.” Please read point 8 of Document Claim No. ANUHCV 2009/0149, Order – Appointment of New Liquidators in the following link: http://es.scribd.com/doc/79506940/
Nevertheless, in the “Overview of the Claims Process," you stated the following: “In a liquidation where there are elements of a ‘Ponzi scheme' involved, it has become a general rule (as endorsed in the Madoff matter by the US Court of Appeals in New York), to look to the net cash deposited by each claimant at the date of the start of liquidation… Therefore to arrive at the most equitable position as between claimants, distributions of interest prior to the liquidation are treated as a return of principal."
COViSAL asks: If in Antigua, under the IBCA Act, Judge Harris ordered the liquidation and dissolution of SIBL for falsification of records in April of 2009, and in May of 2011 Judge Michel ratified the order of liquidation and dissolution for insolvency of the bank, to what Antiguan law do you refer when you relate the Stanford Case to what was endorsed by the Appellate Court of New York in the Madoff Ponzi scheme?
Clarification:
COViSAL, in its pursuit for the recovery of the savings of the “non-US victims," will be present in all the notifications for claim's registration implemented by any jurisdiction.
Petitions:
1. In relation to this formal claims process implemented by the Antigua Liquidation COViSAL respectfully requests the following:
a) To make account statements available to all creditors of the bank from the date the creditor became a client of SIBL.
b) To amend the claim form, considering the Terms of Deposit of SIBL: type of CD, daily compounding interest, penalty for early withdrawal, maturity conditions, automatic renewal and opening of a new CD.
c) To adjust the “Personal – PDF form," “Corporate/Trust – PDF form,” and the “Creditor Claim Worksheets” in accordance with the account statements issued by SIBL.
d) To verify that the amended claim form, with its respective amended additional forms, applies to all customers of the Bank in a simple way; in other words, that it equally applies to holders of CDs and other accounts, to users of credit cards (Visa and MasterCard) of SIBL, to the customers who had money loans guaranteed with their deposits at SIBL, and to clients that gave instructions to SIBL for the payment of invoices on their behalf.
e) Identify each claim with a “Claim ID Number.”
2. In relation to the process of liquidation of SIBL in Antigua, we respectfully beg you and the US Receiver, without any further delay and in harmony, to sign a Cross-Border Insolvency Cooperation Protocol to allow for the recovery of assets without duplicating efforts or expenses. This Cooperation Protocol would oblige both parties to share records and documents indispensable to successfully achieving third party lawsuits, it would compel you to implement only one “Process of Claims Certification” and it would oblige you to formally elaborate joint reports to give the judicial process the transparency it lacks.
3. Additionally, we appreciate that e-mails, communications, reports, and online presentations continue to be published simultaneously in two languages: English and Spanish. Furthermore, we take this opportunity to request the translator of the online presentations to speak Spanish slower and identify the person speaking during the interaction.
During these 1,087 days of struggle, COViSAL has sadly observed how the possibility of receiving an economic relief to mitigate the suffering of thousands of innocent elderly, desperate for the lack of their savings, vanishes in fees and useless legal fights.
Mr. Wide and Mr. Dickson, don’t let us down.
Sincerely,
/s/ Jaime R. Escalona
Jaime R. Escalona
On behalf of COViSAL
Leader
Coalición Víctimas de Stanford América Latina (COViSAL)
Twitter: @COViSAL
Caracas: (58 412) 617 2438 (58 414) 377 5898
Texas: (512) 377 6133 (214) 377 0355
CC:
Edward Davis, Co-General Counsel for SIBL’s Joint Liquidators;
Hon. Judge Mario Michel, High Court of Justice of Antigua and Barbuda;
Hon. Judge David C. Godbey, US District Court Northern District of Texas;
Hon. Judge David Hittner, US District Court Southern District of Texas;
Ralph S. Janvey, US Receiver; Kevin Sadler, Receiver’s attorney;
John Little, Stanford Examiner; Stanford Official Investors Committee;
Hon. Mary Schapiro, SEC’s Chairman;
Honorable SEC Commissioners:
Elisse Walter, Luis Aguilar, Troy Paredes and Daniel M. Gallagher;
Noelle Maloney, Interim Inspector General SEC;
Robert Cook, SEC’s Director of the Division of Trading and Markets;
Orlan Johnson, President of SIPC’s Board of Directors;
Stephen Harbeck, SIPC’s President & CEO;
Senators of the US Congress:
David Vitter, Roger Wicker and Richard Shelby, Banking, Housing and Urban Affairs; Thad Cochran Appropriations Committee ; John Kerry and Richard Lugar, Foreign Relations Committee;
Representatives of the US Congress:
Ileana Ros-Lehtinen, Committee Foreign Affairs and Mike Coffman;
Executive Committee Insol International:
Gordon Stewart, President; James H.M. Sprayregen, Vice-President; Mark Robinson, Treasurer and Claire Broughton, Executive Director;
Members of COViSAL.