Victims of that other Ponzi scheme—Allen Stanford’s—say they have been short-changed.
Ten years after the second biggest investor fraud in U.S. history, victims of the $8 billion Ponzi scheme run by disgraced financier R. Allen Stanford have recovered practically nothing, court records show.
"The only true justice Stanford's victims could ever see is in getting their savings back," said Angela Shaw, whose family lost millions in the collapse."Sadly, all they have seen and can expect to see is a few pennies on the dollar." On Feb. 17, 2009, the SEC and FBI agents raided Stanford's Houston headquarters, shutting down the Stanford Financial Group's worldwide operations. In a civil complaint, the SEC accused Stanford and his associates of running a"massive, ongoing fraud" based on certificates of deposit issued by Stanford International Bank in Antigua and sold to investors by Stanford's U.S.-based brokerage arm.
According to the most recent figures from Ralph Janvey, the court-appointed receiver rounding up funds for the victims, about $500 million of the roughly $5 billion in investor losses had been recovered as of Oct. 31, 2018. Of that, a court has approved about $224 million in fees and expenses for Janvey and his team. That leaves about $275 million — or about 5 cents on the dollar — for the victims.
Even if all of Janvey's efforts are successful, Stanford's investors are likely to receive only pennies on the dollar, while Madoff investors have recovered about 75 cents on the dollar in principal — and counting. Sadler said the difference is the result of different treatment of the two frauds by the agencies that normally look out for investors.
Sadler also noted that the Justice Department has recovered some $8 billion for Madoff victims through criminal prosecutions, including a $2 billion settlement with Madoff's primary bank, JPMorgan Chase. But in the Stanford case, prosecutors only targeted individuals.
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