Cases: Stanford International Bank

Background

We have co-led a worldwide asset recovery campaign to recover more than US$5.5 billion of assets, following the the collapse of the huge Ponzi scheme led by Robert Allen Stanford between 1990 to 2009 using his offshore bank, Stanford International Bank (SIB).

The Antiguan bank grew to have 22,000 customers from 141 countries and a purported US$8.5 billion of assets and US$7.2 billion in deposit liabilities.

The truth was that SIB only had about US$320 million in bank deposits in Switzerland, the UK and Canada, and was being run as a Ponzi scheme – the second largest ever recorded. Stanford held about US$200 million in other assets (land) through a number of companies.

Worldwide asset tracing

Since 2011, there has been an international effort to recover assets for SIB’s Antiguan estate.

Martin Kenney and Ed Davis (of Sequor Law) led negotiations on behalf of the estate with the U.S. Department of Justice, the SEC, and the SEC receiver, which led to a Cross-Border Insolvency Cooperation Protocol and settlement over the assets in Switzerland, the UK, Canada and elsewhere.

This allowed the sharing of evidence and information between the two estates and the development of a coherent method of dividing up assets and claims based on their location. It has also led to the harmonisation of the two estates’ creditor claim adjudication and distributions processes.

The mission has since been to try to recover as much of the US$5.5 billion deficit on SIB’s balance sheet as possible.

Recovery campaign

To date, the team co-led by Kenney and Davis has helped the estate to recover a significant number of assets.

This has included US$3.2 million from Panama, US$100 million from the UK, frozen real estate located in Antigua and Barbuda appraised at US$212 million, selling a building in Antigua for US$4.5 million and land in Antigua for US$70 million.

The team has also secured US$10 million of VAT tax refund judgments against the Government of Antigua and Barbuda, while the government there is in discussions with the estate about paying such judgments in kind with land.

The team has also advanced the recovery of approximately US$300 million in bank deposits frozen at the request of U.S. Department of Justice in Canada, Switzerland and the UK.

About US$150 million of these funds have been recovered and split between the two estates in Antigua and Texas, while a remaining US$150 million was recovered from Switzerland in December 2020.

To date, the team co-led by Kenney and Davis has helped the estate to recover a significant number of other assets, including in excess of US$12 million from Colombia. A settlement of US$20 million for a malpractice claim of the estate was also achieved with Chadbourne & Parke LLP.

Team members

• Martin Kenney