Friday, 18 May 2012 02:30
By press release
Stanford
Receivers
Antigua St John's - The
victims of the R Allen Stanford Ponzi scheme are not keeping quiet in the wake
of his conviction.
On Thursday,
the Latin American grouping of investors wrote the following letter to the US
receiver and joint liquidators.
It in, they complain about the disbursement of funds so far, and called for
transparency.
An Open Letter from COVISAL to the US Receiver and the Joint Liquidators
Three Years, two months and 17 days, and this is where we stand - Stanford’s
victims: $0 economic relief, US Receiver and Liquidators: $150 million in Fees
and Expenses
Dear US Receiver Ralph Janvey, and Joint Liquidators Marcus Wide and Hugh
Dickson,
The saga drags on for the victims of Stanford’s fraud as litigation continues
to generate fees for you, your attorneys, and professionals - the only
beneficiaries so far, charging millions of dollars in fees and expenses. I
wonder why it is that you receive compensation from our stolen money? Is this
an ethical outcome? Shouldn’t you be compensated by contingency based on real
results?
Mr. Janvey, you have “recovered” approximately $217 million for the period of
February 17, 2009, through December 31, 2011; of this amount, $63 million was
available in cash at the time of your appointment, requiring no effort on your
part. Adjusting that total amount, the actual earned recovery by the you is
approximately $154 million of actual recoveries. During the same period, you
incurred professional fees and other expenses totaling $112 million for your
attorneys, accountants and consultants, leaving a mere $102 million for a
possible distribution to the victims of the fraud. The Receivership
Expenditures are: $62 million for professional fees and expenses (Baker Boots
has been paid $22.3 million; FTI has been paid $21.5 million; Ernst and Young
has been paid $7 million; and Thompson & Knight has been paid $3.8 million.
These figures do not include the professional fees “held back” totaling $16
million), plus $50 million for “winding down” costs.
The cost-to-recovery ratio between the Actual Recoveries and the Receivership
Expenditures is an incredible 83.43% (i.e. $0.83 cents were spent to recover
$1.00).
Mr. Wide and Mr. Dickson, on February 10, 2012, Mr. Wide presented your Second
Report to the Eastern Caribbean Court – The High Court of Justice Antigua &
Barbuda. The report shows that from May 12, 2011 to January 31, 2012, the law
firms involved with the SIBL in Liquidation received the following payments in
fees and expenses: $1,630,794.00 for Grant Thornton, Joint Liquidators of SIBL
in Antigua; $516,549.00 for Astigarraga Davis, counsel to the Joint Liquidators;
and $1,367,486.00 for Martin Kenney & Co., also counsel to the Joint
Liquidators.
The following unidentified law firms were paid these amounts: $1,373,671.00 for
attorneys in Canada, $534,210.00 for attorneys in the U.K., $666,331.00 for
attorneys in the United States; $170,371.00 for attorneys in Switzerland,
$172,418.00 for attorneys in Latin America, $75,129,00 for attorneys in
Antigua, $99,454.00 for consultant's fees, $324,174.00 for Antiguan property
related fees; and $1,186,750.00 for other operational expenses. We would like
these unnamed law firms to be identified and to see the detailed bills of their
work as well as comprehensive invoices for each of the payments made. There is
also a payment of $2,822,495 made from the cash available for costs awarded for the removal of the former Liquidators, paid to Alex Fundora and his
attorney Edward Davis of Astigarraga Davis, now the actual counsel for the
Joint Liquidators.
Furthermore, you received a $15 million loan from the victims’ patrimony frozen
in the United Kingdom with an interest of 5.4% per annum, which you registered
as income of $14,740,076.00. You only have recovered $8,110,527.00, and made
payments of $10,939,829.00 for legal fees and expenses, leaving a balance on
hand of $11,910,774.00. In addition, it is important to point out that there is
a contingency liability (professional fees) for $18,000,000.00, claimed by the
former Joint Liquidators FRP Advisory, LLC (Vantis), in addition to the $18
million and a $14.7 million loan. The cost-to-recovery ratio between the Actual
Recoveries and the Joint Liquidators Expenditures, considering the data
mentioned above, is an astounding 550% (i.e. $5.50 would be spent to recover
$1.00).
One gets the impression that the money available from our stolen savings is simply
petty cash for the attorneys and professionals managing the receivership and
the liquidation. You are getting rich quick, and the victims are unable to pay
for their living expenses, and medical bills; many are living in poverty.
What honest and transparent legal entity is providing oversight of the
liquidation’s and receivership’s affairs? Where are the check and balances? It
is unacceptable that the Courts in the United States and Antigua, to the
detriment of the Stanford’s victims, have allowed you, who were named to
prevent the waste and squandering of the creditors' patrimony, to continue
fighting for the assets for so long - duplicating costs and efforts, and
hindering the possibilities of a pro rata distribution of the victims’
patrimony. This legal turf war among yourselves must stop. We demand the
immediate restoration of our savings, stolen by Allen Stanford and his
accomplices, to the rightful owners and victims, the SIB CD depositors who make
up 99.9 % of all creditors, of which 85% are non US citizens and more than 62%
are from Latin America. Our CD funds were used to finance all other Stanford
operations in the US and other countries around the world. The innocent and
unaware victims of this fraud must receive priority status on the distribution
that would be implemented, according to the remission regulations at 28 C.F.R.
Part 9 of the Department of Justice. We do not want our savings diluted to pay
other non-SIB creditors. SIB depositors were the real generators of the capital used by all the Stanford entities.
We appreciate the interest and commitment of the Asset Forfeiture and Money
Laundering Section of the US Department of Justice in participating in the
oversight of the claim's process and the Distribution Plan, and in having a voice
in the determination of the reasonableness of total asset recovery charges in
order to make sure that the costs of this process are reasonable in order to
preserve the greatest amount of assets for the victims. Please make sure that
the $330 million of our savings, confiscated in the UK, Switzerland and Canada,
and the money being held by the US Receiver, are distributed to the victims,
holders of CDs from SIBL, in a direct, efficient and economical way, regardless
of nationality or location and without appeals, retention of money for future
real estate developments in Antigua, further litigation, more legal fees and
expenses, or payments to intermediaries - including the IRS from the United
States. These funds are all that remains of our stolen savings and must be
returned to the rightful owners!
We consider the Receivership’s class action accomplishments in the recollection
of assets for the victims’ distribution fund very frustrating. For this reason,
the class actions are the only venue of real recovery for the modest small
investors who do not have any money to hire attorneys to defend them
individually.
We request that the US Receiver, and the Stanford Investors Committee show us
the real picture of all the litigation claims brought by you to the Court. What
is the actual potential amount of recovery of all the domestic litigation
listed in your joint report? What law suits are moving forward and which are
not? What about any international litigation and the amounts you are seeking to
recover? The victims from Latin America, who represent more than 62% of the
total of victims, have felt ignored and somewhat discriminated against. We have
been kept uninformed and at bay, so far for more than two years, and have not
received any updates in Spanish during this time. We hope that this will change from this day forward.
Because of these implications, the Stanford Case has become an example of the
lack of ethics and morality exercised by the US government on the world stage
that transcends the financial arena to a decidedly political one. For this
reason, we are convinced that if this monstrous fraud, which operated with
impunity for longer than a decade in and from the United States, is not
resolved satisfactorily for all the victims, with equality, the worldwide
discredit of the United States for securities' fraud will deepen, increasing
the distrust that currently exists in its financial sector even more.
We exhort the Official Stanford Investors Committee, which represents all
Stanford investors’ interests worldwide, to voice our cry and concerns
expressed in this open letter to the Court and other authorities responsible
for the Stanford Case, and to please keep us informed of any developments. We
hope that the tears of the innocent families soften hardened hearts, and the
devastated depositors are able to recover their losses without added setbacks;
that our due process and other constitutional rights must be respected, and
that Stanford’s accomplices, who run free enjoying life, are brought to justice
for their involvement.
COVISAL hopes that the authorities responsible for the Stanford Case make their
principles coincide with their actions and show the world, with actions, its
commitment to honesty, equality and justice.
We pray to God that without any more delay, the rights to the victims prevail
over the judicial manipulations, and that conscience is the instrument to
impart justice. May God bless the hearts of the thousands of innocent families
- victims of a fraud that still continues!
Jaime R. Escalona
On behalf of Covisal
Leader
Coalición Víctimas de Stanford América Latina
(COViSAL)
http://covisal.blogspot.com/
http://es.scribd.com/jaenrodes
Twitter: @COViSAL
Texas: 512) 377 6133
Caracas, Venezuela (58 412) 617 2438
Read more: http://www.caribarena.com/antigua/news/100554-stanford-victims-write-to-receivers.html#ixzz1vE57U4u9
http://covisal.blogspot.com/
http://es.scribd.com/jaenrodes
Twitter: @COViSAL
Texas: 512) 377 6133
Caracas, Venezuela (58 412) 617 2438
Read more: http://www.caribarena.com/antigua/news/100554-stanford-victims-write-to-receivers.html#ixzz1vE57U4u9