A motion has been filed in the US District court to protect Stanford Victims from what they view as the overspending by the court-appointed receiver and the negligence of the Stanford Investor Committee.
Acting on their behalf, Kachroo Legal Services, PC has filed a motion to intervene, and for appointment to the Committee.
The motion said KLS Stanford Victims are “dissatisfied with the actions and omissions of the Receiver and believe their interests are not adequately represented in the receivership.”
It also said the receiver has failed in his directive to “minimize expenses in furtherance of maximum and timely disbursement thereof to claimants,” as ordered by the court.
|A release from the Victims’ group is reprinted here, along with a copy of the motion.|
They say that since the US Securities and Exchange Commission (SEC) shut down Stanford’s investing and banking operations in 2009 the money collected, which were intended to help them recover their losses, has mostly been used to pay expenses.
According to the motion filed yesterday by Kachroo Legal Services, P.C. and its principal, Gaytri Kachroo, out of the US$7 billion which investors were allegedly defrauded out of through the sale of certificates by the Antigua-based Stanford International Bank (SIB), court-appointed receiver Ralph Janvey has collected – minus expenses – US$1.5 million.
“Whereas, through January 2011 the receivership estate has paid out a massive US$118.2 million in expenses, but none to the investors. As a result, there remains only US$1.5 million for the Stanford victims from the efforts of the receiver. This equates to US$71.42 per investor, but even this small amount will likely be consumed by the receiver,” the Stanford International Victims Group said in a statement issued after the motion was filed.
“It is clear that the receiver has not added any substantial value to the estate, and failed in his directive.”
In the motion, led by Catherine Burnell of Antigua and the U.K., Ursula Mesa of Florida and Peru, Marcelo Avila of Ecuador, and Steven Graham of Louisiana – representative of the international breadth of investment into the alleged Ponzi scheme – investors state that Janvey has taken all US$120 million of the assets thus far collected by him and already existing in the estate.
The investors also claim that the attorneys who were installed on the Stanford Investors Committee which is responsible for holding the receiver accountable, had struck a deal to make themselves a preapproved 25 percent on all the fraudulent conveyance cases launched by the receivership.
The Committee was set up in August last year, after a judge granted a request by the victims, to look out for the investors’ interest and give them a say in the recovery of assets.
However, the investors say “no party to the receivership is acting as a check on the excessive fees and expenses compared to the minimal recovery, challenging the contingency fee arrangement, the operation of the receivership, and otherwise voicing concern over the ineffectiveness of this receivership”.
Janvey has not yet responded to the allegations.