NEW YORK, Mon Feb 18, 2013 — The Official Stanford Investors Committee and the court-appointed receiver of Allen Stanford’s financial empire have sued Antigua and Barbuda, the Eastern Caribbean Central Bank and 23 former Stanford Financial Group Co. executives, accusing them of assisting in the financier’s $7 billion Ponzi scheme.
The committee is seeking at least $90 million of transfers to Antigua, according to the complaint filed on Feb. 15 in U.S. Federal Court in Dallas. It also is seeking punitive damages. It accuses Antigua and Barbuda of shielding Stanford’s activities in exchange for loans that were not repaid and real estate.
The suit accuses the twin-island nation of being a “‘blood brother’ to Stanford, and an integral component of Stanford’s fraudulent enterprise”, according to court documents.
Stanford, 62, is appealing his March 2012 conviction and 110-year prison sentence over what prosecutors called a massive fraud centered on the sale of bogus certificates of deposit by his Antigua-based Stanford International Bank.
NEW YORK, Wed Aug 15, 2012 – American International Group Inc. does not have to cover insurance claims from two former Bernard Madoff clients who sought compensation for their losses under their homeowner’s policy, a federal appeals court ruled on Wednesday.
The 2nd U.S. Circuit Court of Appeals rejected an appeal from Robert and Harlene Horowitz, who had sought up to $30,000 in coverage under a fraud safeguard provision in their homeowner’s policy with AIG. The two California residents had sought to make their lawsuit a class action on behalf of other AIG policyholders.
The Horowitzes said they lost $8.5 million from their Madoff account when the money manager’s Ponzi scheme was uncovered in 2008, reflecting the amount on their final account statement. But AIG denied they suffered any direct loss under the terms of their insurance policy.
The Horowitzes had deposited $4.3 million in their Madoff account over nearly 10 years and withdrawn about $4.5 million over the same period, leaving them with $226,000 more than they invested, according to Wednesday’s ruling. The $8.5 million claim was the indirect loss of potential returns on their initial investment, a scenario that was explicitly excluded from coverage under their policy, AIG argued.
In September 2010, U.S. District Judge Paul Crotty in Manhattan agreed with AIG and dismissed the lawsuit. The plaintiffs appealed to the 2nd Circuit, which backed Crotty’s ruling.
“The policy expressly excludes coverage for indirect losses — a term that includes the inability to realize income from the money, securities or other property that would have been realized but for the fraud,” the appeals court wrote.
AIG could not immediately be reached for comment. A lawyer for the plaintiffs was also not immediately available.
Madoff is serving a 150-year prison sentence after admitting to running what prosecutors called a $65 billion Ponzi scheme.
HOUSTON ― Financier Allen Stanford is suffering from brain injury and memory loss, witnesses said on Wednesday at a hearing on whether the accused swindler can stand trial.
Stanford is accused of defrauding his investors with a $7 billion Ponzi scheme. His lawyers argue he is not competent to go to trial because a jailhouse fight has left him with severe memory loss.
“Mr. Stanford is not competent to stand trial today,” said forensic psychologist Victor Scarano, one of three doctors who testified for the defense on Wednesday.
On Tuesday, a prison psychologist testified that Stanford was competent.
The hearing goes into a third day on Thursday. Judge David Hittner, who must decide whether Stanford’s trial on fraud charges can go ahead as scheduled on Jan. 23, said he would make a quick decision. Stanford has pleaded not guilty to the charges.
Stanford, 61, sat quietly at the defense table during Wednesday’s proceedings. Hittner allowed his handcuffs to be removed so he could take notes to communicate with his lawyers.
While Scarano testified that Stanford would be unable to analyze documents in a fraud trial, Assistant U.S. Attorney Gregg Costa noted that Stanford had been able to file a lawsuit against the government during the time doctors said he was incompetent.
Stanford “fooled investors for 20 years. Why couldn’t he fool a few doctors,” Costa said.
Stanford once owned luxury homes in the Caribbean, Houston and Miami. He was arrested in June 2009 and has been indicted on charges of fraud, conspiracy and money laundering stemming from the alleged Ponzi scheme. A Ponzi scheme is a fraud in which existing investors are paid with the deposits of newer ones.