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Some 15 years after first being announced and nearly a decade of litigation, the victims of the $7 billion Ponzi scheme orchestrated by financier Robert Allen Stanford could soon receive their settlement payments, although it may be too late for some of them, The New York Times reports.
It’s a decision fraud victims have to agonize over in the wake of a big financial scam: Large investors offer them cash in exchange for the rights to any future payment. Many small investors who don’t have much insight into what might happen next may feel they don’t have a choice but to settle for a quick lump sum, rather than wait for a future payment that may never come.
When Thomas Swingle and his wife, Cindy Finch, sold their claim, it appeared Stanford’s defrauded customers were unlikely to get anything back at all. Had the couple held on to the rights, they might be able to claim as much as $350,000.
“It didn’t turn out good for us,” Swingle says, “but you got to move on.”
Jean Anne Mayhall, 72, is also a Stanford victim. She says her mother, who has since died, sold her claim because she was tired of waiting. She says the lawsuits against the banks dragged on for so long that many customers simply gave up.
Mayhall, who lives in a small town near New Orleans, held on to her $500,000 claim, but she knows of more than a dozen victims who died waiting to get any money back.
Over the years, Stanford has managed to slow down any recoveries for victims. In 2023, after about a decade of litigation, a handful of banks—most notably Toronto-based TD Bank—agreed to pay about $1.2 billion to settle claims accusing it of ignoring red flags about Stanford’s operations, but the distribution of those settlements was held up by legal objections filed by Stanford.
Now, the securities lawyer appointed to serve as a receiver in the case, Ralph S. Janvey, is starting to make big payments. He has already paid about $609 million to the firm’s former customers, and he has about $157 million more to dole out in addition to the $1.2 billion. That’s far from the total claims of about $4.9 billion, owed to more than 20,000 customers around the world, but it is more than victims like Swingle ever thought would be available.
Read the full story from The New York Times, and read a recent story by Business Report on the scandal here.
