COALICION VICTIMAS DE STANFORD AMERICA LATINA (COViSAL)
An Open Letter to the Joint
Liquidators, the U.S. Receiver, and other authorities responsible for the Stanford
Case: Stanford's victims continue to die
as a result of your actions and inactions.
Dear Mr. Wide, Mr. Dickson, and Mr. Janvey:
We respectfully address you to express our indignation for the unscrupulous handling of the Stanford Case
that has hidden guilt and evaded responsibilities, without regard to the
suffering of the innocent victims who lost their life-savings. It is almost four
years since our savings were stolen by Allen Stanford and his accomplices.
So far, we have not received a penny of our stolen patrimony. We have been kept
in the dark all these years about the progress of the recovery, and its distribution.
Since the Securities
and Exchange Commission (“SEC”) filed the civil lawsuit against Allen Stanford,
his companies and related parties in February of 2009, COViSAL asked the U.S.
Receiver, Ralph Janvey, and the Joint Liquidators of the Stanford International
Bank Limited, (“SIBL”), Marcus Wide and Hugh Dickson of Grant Thornton, through
letters and press releases, to set aside their pettiness and economic interests,
and end the shameful game of “cat and mouse” that has wasted the Stanford
victims’ patrimony in a never-ending litigation carousel.
Earlier this year, David Kotz, the former Inspector
General of the SEC published an article titled: “Comparing the Asset Recovery
Efforts in the Madoff and Stanford Ponzi Schemes." He writes: “By all
accounts Picard and Sheehan have been tremendously successful. According to
published reports, since being named trustee, Picard has filed more than 1,000
lawsuits, and recovered about $11 billion of the approximately $17 billion of
capital believed to have been lost in the Madoff fraud. On the other hand,
Janvey hasn't fared as well for the Stanford victims; he has recovered $217
million, according to recent reports, but has incurred $102 million in fees,
making the actual recovery approximately $115 million… Janvey has been
criticized by Stanford's investors for his high fees, not giving them updates
and the "glacial" speed of the process.”
On November 6, 2012, the Wall Street Journal
published an article titled: “Madoff Recoveries Increase. Trustee Said
He Has Collected More Than Half of $17.3 Billion in Principal Lost… More than
half of investors' funds have been recovered nearly four years after Bernard
Madoff's arrest for running the biggest Ponzi scheme ever.” Why is Madoff’s recovery effort more productive
than Stanford’s recovery effort?
In addition to the U.S. Receiver’s exorbitant
fees and expenses, Mr. Wide and Mr. Dickson, received a $20 million loan from
the UK Frozen Funds, which has now been drawn down in full. This loan was approved
by the UK Court from the victims’ patrimony frozen in the United Kingdom. During
the period of May 12, 2011 to June 30, 2012, you received $8 million dollars
from cash available in a account in Panama and proceeds from the sale of the
ECAB Bank building; you incurred $19.6 million in legal fees and expenses, leaving
a balance on hand of $8 million as of June 30, 2012. You are spending more than
$1 million dollars a month in fees and expenses – most likely the $8 million
balance will be depleted before the end of the year, and to date you have not
made any recoveries. It is important to
point out that the Joint Liquidators have a contingency liability (professional
fees) for $18 million, claimed by the former Joint Liquidators, Nigel
Hamilton-Smith and Peter Wastell of FRP Advisory, LLC (Vantis), and the
outstanding loan for $20 million. What is the actual cost-to-recovery ratio of
the Joint Liquidators, including all the variables?
Considering the data mentioned above, we
estimate that the cost-to-recovery ratio between the Actual Recoveries and the U.S.
Receivership Expenditures is an incredible 83.43% (i.e. $0.83 cents spent to
recover $1.00). The cost-to-recovery ratio between the Actual Recoveries and
the Joint Liquidators Expenditures, (excluding the $18 million professional liability,
and the $20 million loan liability) is an astounding 245% (i.e. $2.45 spent to
recover $1.00). Why are the Courts allowing this bonanza that only benefits the
Receivers, the Joint Liquidators, and their comrades?
One gets the impression that money available
from our stolen savings is simply petty cash for the attorneys and their professionals
managing the receivership and the liquidation. You are getting rich quick, while
the victims are unable to pay for their basic living expenses and medical bills;
many are living in poverty, while you collect high fees, enjoy first-class
travel, fine-dining, and luxury hotels at our expense. Why are you receiving
compensation from our stolen money? Is this an ethical outcome? Shouldn’t you
be compensated by contingency based on real results?
The saga drags on for the Stanford’s victims as litigation, and delays of
an agreement between the Joint Liquidators, and the U.S. Receiver continue to
generate fees for you, your attorneys and professionals - the only
beneficiaries so far who have collected more than $150 million. COViSAL
regularly receives calls and emails from desperate families asking for help. Recently,
a woman said: “My mother is very ill, and we do not have any insurance or money
to pay for a surgery that she urgently needs. We lost it all with Stanford. Help
me please! She’s dying.” Another person said: “My father worked so hard for 45
years to save for his retirement and family’s patrimony. He couldn’t overcome
the loss of all of his life-savings; he died of desperation and sickness.” Another
victim said: “My grandson suffers from autism, and we had to discontinue his
medical treatments because we cannot pay for them anymore. We lost all our
savings with Stanford.” There are many more heart-breaking and tragic stories
of families in Latin America and other countries that are suffering a great
deal as a result of this horrendous fraud.
The authorities responsible for the Stanford Case seem
indifferent and oblivious of this social calamity. The victims are kept clueless
and unaware of what is going on; many are unable to endure more suffering and discrimination.
They are in dire straits, and feel defrauded over again. Now, to add insult to injury, former Stanford
financial advisers, and companies being promoted on the Joint Liquidators’
website are taking advantage of the chaos and uncertainty; they are lurking for
desperate people to entice them to sell their claims against SIBL, for a few
cents on the dollar. This senseless abuse must stop now!
We exhort the Official Stanford Investors
Committee, which represents all Stanford investors’ interests worldwide,
to step forward, voice our cry and concerns expressed in this open letter to
the Court, and other authorities responsible for the Stanford Case. We demand
to see the real picture of all the litigation claims brought to the Court, the
status of all recovery efforts, the claims registration process, and the first distribution
to the victims. What is the actual potential amount of recovery of all the domestic
litigation listed in your last joint report? What are your recovery actions
internationally? What law suits are moving forward, and which are not? When can
we expect the first distribution? What is the actual potential amount of
recovery from the actions taken by the Joint Liquidators? Where is our money? We ask the U.S. Department of Justice and the
Courts to make sure that our stolen patrimony is returned directly to families,
holders of SIBL’s CDs. Stanford’s victims are in extreme need; we have endured
four challenging years, four Thanksgivings, and four Christmases without
receiving an economic relief.
We find it deplorable that Courts in the United
States and in Antigua, have allowed the U.S. Receiver, and the Joint
Liquidators, who were named to prevent the waste and squandering of the creditors'
patrimony, to continue fighting for the control of the assets - duplicating
costs and efforts, and hindering the possibilities of a distribution of the
victims’ patrimony.
What honest and transparent legal entity is
providing oversight of the liquidation’s and receivership’s affairs? Where are
the check and balances? Who is protecting our interests? Are our fundamental rights being considered?
The authorities responsible for the Stanford
Case should make their principles coincide with their actions and show the
world their commitment to honesty, equality and justice.
We pray to God that without any more obstacles,
victims’ rights prevail, and the administration of justice is imparted with a
good conscience.
Jaime R. Escalona
On behalf of COViSAL
