Victims of Allen Stanford's $7B Ponzi Scheme Will Wait Years to Be Repaid

At first glance, the effort to recover money for victims of Allen Stanford’s $7 billion Ponzi scheme looks a bit like Jarndyce and Jarndyce, the endless chancery court case satirized in Charles Dickens’ book, “Bleak House.” Stanford, you’ll recall, was convicted by a Houston jury in 2012 for swindling investors and sentenced to 110 years in prison.

Eight years into the case, with no end in sight, the receivership set up in Dallas federal court to unwind Stanford’s fraud has turned up only a small percentage of investors’ lost billions. Just as troubling, nearly half of what has been secured so far has gone to pay lawyers and accountants.

Dickens’ fictional case, concerning a disputed will, ends with the announcement that no money is left to fight over because lawyers’ fees consumed it all.

In real-life, Securities and Exchange Commission v. Stanford International Bank Ltd., receiver Ralph Janvey’s most recent report to the court states that lawyers and other professionals they’ve hired have collected $136.2 million in fees and expenses, spent $59.6 million on “non-professional” expenses, and distributed $94.2 million to victims. They have another $116 million on hand, about $60 million of which is available for victims. Legal settlements already inked put another $232 million in the pipeline.

Read more: https://www.dmagazine.com/publications/d-ceo/2017/november/allen-stanford-ponzi-scheme/