"Stanford received land transfers with government
assistance [in return], operated Antigua's airport, built the national library,
sponsored the country's cricket tournament, and improperly 'loaned' the
government tens of millions of dollars of the CD investors' money for
innumerable commercial enterprises..."
The receiver and official creditors committee
representing victims of Allen Stanford's $7 billion Ponzi scheme filed
a lawsuit accusing the dual-island nation of Antigua and Bermuda of serving
as Stanford's 'blood brother' in providing necessary assistance to sustain the
massive scheme. Stanford, who is currently serving (and appealing) a
110-year sentence for masterminding the scheme, was once a 'favorite son' of
Antigua where he enjoyed close relationships with various government and regulatory
officials. A separate lawsuit also asserted similar charges against eight
Caribbean banks. The lawsuits are seeking over $230 million in damages,
as well as an award of punitive damages
As a result of these relationships, investors alleged
that Antigua was a prime participant, beneficiary, and co-conspirator in
Stanford's fraud, having received nearly $90 million in documented loans from
Stanford that were not repaid and instead served as an incentive to overlook
Stanford's activities. Indeed, according to the suit, the Eastern
Caribbean Central Bank ("ECCB") nationalized the Bank of Antigua soon
after Stanford's fraud was exposed, and in a 'second act of brazen thievery'
then distributed ownership in the bank to the Antiguan government and other Caribbean
banks. Further adding to the suspicious nature of these actions, the head
of ECCB's monetary council at the time was Errol Court, who was both the
Antiguan Minister of Finance and one of Stanford's personal attorneys.
Another banking regulator, Leroy King, was accused of
taking bribes from Stanford in return for falsifying bank audits as well as
impeding U.S. regulatory investigations of Stanford's operations. While
King faces criminal charges, Antiguan authorities have thus far refused to participate
in his extradition.
In the separate lawsuit brought by court-appointed
receiver Ralph Janvey, twenty-three former directors and officers of Stanford's
operations were accused of breaching their fiduciary duties to investors.
Janvey is seeking the return of all compensation paid to those
For more news and analysis of Ponzi schemes, visit
Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
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