COALICION VICTIMAS DE STANFORD AMERICA LATINA (COViSAL)
March 7, 2014
An
Open Letter from COViSAL to the Antiguan Court and the Joint Liquidators
challenging the Court’s decision authorizing claw back claims against innocent
depositors
On
February 17, 2014, COViSAL denounced the Joint Liquidators’ actions to claw
back funds from innocent victims by sending a very damaging letter asking for
the return of money withdrawn from their accounts during the six months prior
to the collapse of the Stanford International Bank Limited (“SIBL”). They
demanded a response within 120 days of receipt of the letter. This
communication was sent in English and the majority of the victims, who are from
Venezuela and other Spanish-speaking countries in Latin America, had difficulty
understanding it. COViSAL’s response can be read at:
http://covisal.blogspot.com/2014/02/stanfords-victims-defrauded-again-by.html
http://covisal.blogspot.com/2014/02/stanfords-victims-defrauded-again-by.html
On February 25, 2014, the Joint
Liquidators sent another letter titled, “Stanford International Bank Ltd. - In
Liquidation – Notice of Declaration,” announcing that “the Joint Liquidators
are now in a position to make a first interim distribution in the amount of
$0.01 on the dollar. If you received a “preference payment," for which you
will have been notified separately, your distribution will be held back until
the Court makes a final determination.”
At the
end of the letter, the Joint Liquidators enclosed a summary of the receipts and
payments covering the period of the liquidation to December 2013. The summary
shows $108.8 million received as of December 31, 2013. Of this amount $95.1
million were part of the $100 million that UK authorities confiscated on April
7, 2009, following a request from the U.S. Department of Justice. Adjusting the
total amount, the actual recovery earned by the Joint Liquidators is
approximately $13.3 million. During the same period, the Joint Liquidators
incurred professional fees and expenses totaling $43.3 million, plus a $15.3
million they reserved for future fees. The cost-to-recovery ratio between the
actual recoveries and the liquidation expenditures is an incredible 441% (i.e.
$4.41 were spent to recover $1.00).
According to the Joint Liquidators’
statement on the SIB Liquidation’s website, they were named on May 12, 2011,
and their mission is “to recover $7 billion in losses stemming from the alleged
R. Allen Stanford multi-billion Ponzi scheme and return the money to
approximately 22,000 creditors in the shortest time possible.” However, it
seems that the only beneficiaries are Mr. Wide, Mr. Dickson and their
colleagues, who are receiving millions of dollars in fees and expenses, lining
their own pockets at an alarming rate. The Joint Liquidators received $3
million a year; their lead counsel $4.3 million, other legal advisers $5.8
million, and $3 million was spent for other operational expenses. We have not
seen any meaningful efforts towards a real recovery for the victims; the Joint
Liquidators are just using the money confiscated in England and Switzerland to
pay themselves and their colleagues, while forcing victims through a gauntlet
for a pittance.
Why are the expenses so vague and
lacking in supportive evidence? What honest and transparent legal entity is
providing oversight of the liquidation’s affairs? Where are the check and
balances?
The real accomplishment of the Joint
Liquidators seems to be in giving themselves “Preferential Payments.”
The
facts about the alleged “Preferential Payments”
Innocent
families, who had their life savings deposited at SIBL, were completely unaware
of any problems the bank was having. There were no red flags or suspicious
circumstances known to the depositors, who continued doing business with SIBL
during its regular commercial operations until the bank closed its doors in
2009. It is a fact that the majority of depositors only became aware of trouble
at SIBL when the SEC seized Stanford Financial Group on February 17, 2009.
In
reference to the withdrawals made by the majority of depositors during the six
months prior to the closing of SIBL’s operations, they were not “Preferential
Payments,” but legitimate withdrawals of part of the principal invested by the
rightful owners of the money, which they deposited and withdrew at the bank
during the ordinary course of business. These withdrawals were made rightfully
and in good faith. Families withdrew part of their invested principal regularly
to pay for living expenses, medical treatments, relatives in need, down
payments, business expenses, etc.
These
families lost their livelihood in Stanford’s fraud; many sold their homes and
what other assets they had left in order to survive for the past five years.
The majority of depositors at SIBL are common people, families who worked very
hard for 30-40 years to save money for their retirement, for a college fund for
their children or grandchildren, and to have savings available for a medical
emergency, among other things. Since the closing of SIBL in 2009, victims of
the fraud have been living in dire straits; many died because they could not
bear the news of losing their savings, or because they could not pay for a
life-saving operation. The Stanford fiasco destroyed their lives.
Recently,
the Joint Liquidators announced a 1% distribution (1 penny on the dollar) of
the victims’ approved remaining net principal because interests and withdrawals
were already deducted. Families saw a ray of hope with the announcement.
However, Mr. Wide and Mr. Dickson decided to drop a bombshell at the last
minute by sending these cold and calculated letters to innocent depositors,
asking them to return their own money to the estate – money they do not have.
Why
are they causing unnecessary harm to families already in emotional distress?
Where are the real foes that caused the run on the bank?
The
Joint Liquidators are aware of the individuals who truly received preferential
payments - namely the “net winners,” the insiders and the individuals who
received tips to get their money out, as well as government entities that
received millions of dollars in unpaid loans. They have all the records and
reports. Allen Stanford, his close confidants, and their “people of influence”
are the ones who received preferential treatment to withdraw their money when
the bank was in trouble in February 2009. It is a shame that Stanford’s
financial advisers continued selling CDs to unaware depositors even after the
SEC and the US Courts had seized Stanford’s operations. See Karyl Van Tassel’s
Affidavit.
The following paragraphs were obtained from court document titled: Class
Action Complaint Wilkinson, Reed v. BDO USA, LLP and
BDO International Ltd., Page 23:
“On February 4, 2009, in advance of a deposition before the SEC,
Stanford Financial Group officials met with outside counsel in Miami. Two days
later, on February 6, 2009, Allen Stanford’s old friend Frans
Vingerhoedt sent Stanford an email, copying David Nanes, that illuminated
Stanford Financial Group’s crumbling empire:
[T]hings are starting to unravel quickly on our side in the Caribbean
and Latin America…[w]e need to come up with a strategy to give preference to
certain wires to people of influence in certain countries, if not we will see a
run on the bank next week …[w]e all know what that means. There are real
bullets out there with my name on [sic], David’s name and many others and they
are very real…[w]e are all in this together.”
One
could deduce from the above email sent by Frans Vingerhoedt, President of
Stanford Caribbean Investment, LLC, dated February 6, 2009, that the bank’s run might have happened the week
of February 9, 2009 at the earliest. If the management of SIBL permitted the
redemption of Certificates of Deposits ("CDs") in the six months
leading up to February 23, 2009, it was most likely their Preferred Customers,
the “Net Winners,” who withdrew their money plus interest - unfairly
prejudicial against all CD creditors and depositors of SIBL, including the
innocent victims wrongly accused in their letter. In fact, the financial
advisors were very well trained to keep depositors from redeeming CDs, and
encouraged many to renew them. They used all kinds of dramatic and intimidating
tactics to keep depositors from redeeming their CDs. They were very successful
and well compensated.
The
actions in pursuing claw backs against innocent investors are supported by
neither logic nor law. The majority of families are in unfortunate situations,
unable to pay for their living and medical expenses, and these actions are
causing them untold harm. The Estate stands to expend a substantial
amount of resources with little prospect for a meaningful recovery - money that
could be used to help victims in need. We consider the claims against innocent
investors for the return of their principal without merit.
Why
prolong the suffering of innocent victims who are already overwhelmed and
do not have the means to defend themselves against the Court of Antigua?
COViSAL’s requests to the Antiguan Court:
· We
ask the Antiguan Court to look at the facts and to not allow the claw backs of
innocent families’ meager funds when they are already victims of this
horrendous fraud. They are “Net Losers,” who withdrew part of their savings,
their own property, in good faith without any knowledge of the bank's predicament
·
The
Joint Liquidators’ actions are creating an undue hardship for innocent families
that are emotionally distressed and in poor health after losing their savings.
There must be consequences for these heartless actions.
·
The
Joint Liquidators, who were named to prevent the waste and squandering of the
creditors' patrimony, must be held accountable for their actions and for
consuming what’s left of our stolen savings.
We greatly value justice and the rule of law,
and ask the Court’s commitment to these values to ensure that justice is
imparted to all innocent depositors who feel defrauded yet again.
COViSAL hopes that the Court in Antigua shows the world its commitment
to fairness and justice.
/s/ Jaime R. Escalona
Jaime R. Escalona
On
behalf of COViSAL
Director
http://covisal.blogspot.com/
jaenrodes@gmail.com
Twitter: @COVISAL
