Open Letter to U.S. House Committee on Financial Services on 10th anniversary of Stanford Financial Group’s debacle; families received pennies; attorneys millions.
COVISAL
For
Restitution
 |
February 16,
2019
Rep. Maxine Waters, Chairwoman Rep.
Al Green, Chair
U.S. House Committee on Financial Services Dems Subcommittee on Oversight
2129 Rayburn House Office Building and
Investigation
Washington, DC 20515 2347
Rayburn HOB, Washington, DC
Re. 10
year anniversary of Stanford Financial Group’s debacle families have received
pennies; Administrators and attorneys millions.
When
Stanford Financial Group (SFG) was seized by U.S. authorities on February 16,
2009, the world changed dramatically for thousands of families in the U.S.,
Latin American, and other countries around the world that had invested their
life savings in a promise of safety under the protective umbrella of the United
States. For non-U.S. depositors it had seemed a wise decision, considering the
volatile nature of many of their own governments, and it was on this principle
that they were sold their certificates of deposit. They entrusted their savings
to a company belonging to an American conglomerate, regulated and supervised by
U.S. regulatory agencies.
However,
their trust was rewarded with a betrayal that resulted in a devastating loss.
Families that had hope for a better future are now living off charity from
neighbors. People are ill and unable to pay for their medical treatments. Lives
have been lost because of an inability to pay for life-saving operations. Latin
American victims were the largest defrauded group -- 15,270 families,
representing 70.24% of depositors with more than $4 billion in losses. The
majority of depositors are from Venezuela; the second largest group is from the
United States.
In the
U.S.
The U.S.
Receiver for SFG, Ralph Janvey, shows $499.9 million recovered, and 224.6
million spent in professional fees and expenses as of October 31, 2018 in his
16th application for fees and expenses registered before the U.S. Federal Court
in Dallas. That’s almost 50 percent of the total amount 'recovered' from
Stanford’s bank accounts and fire sale of assets, leaving only meager sums for
the victims. U.S. Receiver and his attorneys have received $121.5 million,
Stanford’s Examiner $4.0 million, Official Investor’s Committee$37.1 million,
and $61.6 million for other expenses other than professional. Presumably,
$138.5 million were distributed to depositors.
The
receivership’s attorneys and professionals have been very well compensated
during the last ten years for the work they have performed. Unfortunately, they
have not shown real accomplishments to deserve their $700 per hour
fees. They have received more money than the depositors have; many of them
getting millions of dollars, while some of the affected families have received
less than 3 pennies on the dollar during the last 10 years. In contrast, Irving
Picard, attorney overseeing liquidation of Madoff’s firms has recovered $13.9
billion of $19 billion of lost principal. He is on track to recover most of
victim’s lost principal.
In
Antigua
The Joint Liquidators
(JLs) of Stanford International Bank, Ltd (SIBL), Marcus Wide and Hugh Dickson
of Grant Thornton, presented their eighth report before the High Court of
Antigua on April 5, 2017, that shows $64.2 million spent on professional fees
and expenses as of December 31, 2016. This is the last report posted on their
website.
According to
the report total receipts were $181.7 million; however, from this total the JLs
have already spent $89.3 million in fees for attorneys, consultants and other
expenses. So far, they have spent over 50% of the total.
JLs, Marcus
Wide and Hugh Dickson, have received more than $11.5 million, their co-lead
legal advisor $18.3 million, and other unnamed legal advisors $27 million and
over $26.3 million for other expenses. It does not include their fees and
expenses for the last two years. Recently, Mr. Wide retired from Grant Thornton
as of December 31, 2018.
Easy
prey, once again in Antigua
On May 15,
2014, the High Court of Antigua issued an order appointing an Amicus Curiae,
due to the joint liquidators’ application to claw back alleged net winners and
preference creditors. More than a year later, on August 5, 2015, Mr. Justice
Gerhard Wallbank sided with the joint liquidators by issuing an order that
allows them to pursue claims against depositors considered preferential payment
recipients. The majority of depositors accused of receiving alleged preference
payments withdrew some of their savings deposited at SIBL for living expenses,
rightfully and in good will. JLs withheld distribution of $17 million from
innocent families.
Depositors’
Demands
We urge the
U.S. Congress House Financial Services Committee to listen to our outcry and
concerns expressed in this letter, and right a wrong that have been going on
for the 10 years.
Randy
Neugebauer, former U.S. Representative said in his article titled, ‘Allen
Stanford’s Ponzi scheme victims have been shortchanged’, published in the
Financial Times on February 12, 2019: “The US government should be doing more
to right this wrong — and not let Stanford’s heartless scheme drift into the
dustbin of history. We must secure real recoveries for victims, who have had
their lives turned upside down…Congress must re-engage and find out why the
effort to recover money is not working and what can be done. The US government
should also pursue legal claims against the banks that helped the Stanford
scheme operate.”
Lastly, the
U.S. Department of Justice (DOJ) during the negotiations of the Settlement
Agreement and Cross-Border Protocol on March 12, 2013, expressed its commitment
to assist Stanford’s victims to ensure justice to all the families devastated
by this horrendous crime.
Today, we
ask DOJ to take action and help us stop this nonsense that continues to harm
us. You must supervise the distribution of the money confiscated in Switzerland,
as well as the claims process. You must have a voice in the determination of
the reasonableness of total asset recovery and distribution expenses. The joint
liquidators received $90 million from frozen assets in the United Kingdom, they
spent it all in fees and expenses. They only distributed 1% to some depositors,
and retained over $17 million from families accused of receiving preferential
payments, during the sixth month prior to closing of the SIBL -- People who are
net losers and withdrew as little as $1,200 during that period.
Now, the
only money left is $208 million of our savings confiscated in Switzerland; the
Joint Liquidators are supposed to received $65 million and the U.S. Receiver $143
million. This money must be distributed directly to the depositors.
The U.S.
receiver and the joint liquidators were named to conserve, hold, manage, and
prevent any waste of the creditors' patrimony, and to return the money to the
innocent families. The protraction of the recovery of assets, and the very
small settlements are generating high billable hours and expenses to the
administrators and their attorneys, to the detriment of Stanford’s depositors.
What honest
and transparent legal entity is providing oversight of the liquidation’s and
receivership’s affairs? Where are the checks and balances? Are our fundamental
rights being considered?
We insist
that U.S. Government must show the world its commitment to honesty, equality
and justice with concrete and immediate actions. Innocent families in the U.S.,
Latin America, and around the world, have the right to a full restitution of
their savings.
In God, we
trust that the rights of the survivors of this debacle will prevail over
judicial manipulations, and that good conscience will be the instrument to
impart justice, and to stop a never-ending fraud.
Sincerely,
/s/ Jaime
Escalona
Jaime Escalona
On behalf of COViSAL
International coalition of depositors
who lost their life savings
in Stanford Financial Group’s debacle in
2009
Austin, Texas
cc Members of the House Financial Services Committee
Sen. John Cornyn, Sen. Ted Cruz, Sen. Marco Rubio, Rep.
Chip Roy
Kevin M. Sadler, attorney for receiver Ralph Janvey,
David Reece, SEC.
Deborah Connor, Chief, Money Laundering & Asset
Recovery DOJ,
Pamela Hicks, Chief Money Laundering & Forfeiture
Unit
