Three Years, three months and 1 day, Stanford’s victims: $0 economic relief, US Receiver and Liquidators: $150 million in Fees and Expenses
May 17, 2012
An
Open Letter from COVISAL to the US Receiver and the Joint Liquidators
Three
Years, three months and 1 day, 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!
/s/ Jaime R. Escalona
Jaime R. Escalona
On behalf of Covisal
Leader
Coalición Víctimas de Stanford América
Latina (COViSAL)
Twitter: @COViSAL
Texas: 512) 377 6133
Caracas, Venezuela (58 412) 617 2438