Allen Stanford paraded around as a billionaire but the actual business was worth millions not billions, the appointed receiver said Monday.
Ralph Janvey, the Stanford receiver, told U.S. District Judge David Godbey in a Dallas court on Monday that the health of Stanford’s financial empire might only amount to hundreds of millions of dollars, not billions.
`There is a liquidity crisis in this company,` Janvey told Judge Godbey, while adding that the estate’s final assets might only be a `fraction` of what he originally anticipated.
`Based on our preliminary investigation, the liquidity situation and overall financial condition of the Stanford entities can only be described as dire,` Janvey stated. `Evidence is also mounting that the assets of the Estate will be only a fraction of the amount needed to satisfy the anticipated claims against the Estate.`
Judge Godbey meanwhile ruled that the Securities and Exchange Commission could maintain the freeze over Stanford`s assets and set a March 12 hearing to decide on the SEC’s request to make the temporary injunction permanent.
Lawyers for investors who have asked to have some of their money freed immediately weren’t allowed to speak at Monday’s hearing. Janvey, however, told Godbey that he will file a plan by March 16 for releasing accounts that contain less than $100,000, with some exceptions.
`This should alleviate the concerns of some of the people,’’ he told the court. `We are very conscious of the hardship being caused to people who may be very innocent.’’
The SEC has alleged that Stanford and two associates ran a giant ponzi scheme valued at over US$8 million through at least three of his companies. The SEC also alleged that the three misled investors through the sale of fraudulent certificates of deposit through Antigua-based Stanford International Bank.
Neither Stanford nor Stanford Chief Financial Officer James Davis have been criminally charged for allegedly orchestrating the scheme and Davis is pleading the fifth. Stanford Financial Group chief investment officer Laura Pendergest-Holt has, however, been criminally charged with lying to the SEC about what she knew of `Tier Three` — the single largest group of assets at Stanford International Bank in Antigua, which issued certificates of deposit central to the alleged fraud.
So far the government of Antigua has seized both the Bank of Antigua and the Stanford International Bank, based there and are set to also seize 250 acres of Stanford`s land on the island.
Source: caribworldnews.com
