Features                      

Sir Allen Stanford, the American-Antiguan billionaire, recently rose to public notoriety when he embarrassed the England and Wales Cricket Board with his Twenty20 cricket tournament and subsequent arrest in a global fraud case. The bank that bears his name, Stanford International Bank Ltd (SIB), collapsed under him this year, leaving investors worldwide out of pocket, as well as a workforce from the West Indies to Switzerland out of work or unsure of their futures.

The extremely emotive and challenging task of identifying and recovering all assets and monies believed to be owned by or owed to SIB requires extensive forensic accounting investigation, not to mention immeasurable patience and sensitivity towards the thousands who may have lost their livelihoods as a result of the dishonesty that is now coming to light. The appointed receiver is Vantis Business Recovery Services (BRS), a division of the UK accounting, tax and business advisory group Vantis plc.

Nigel Hamilton-Smith is client partner at Vantis BRS, and is joint liquidator of SIB. He explains the complexity of the task his company faces: “The Stanford group of companies owns and controls a vast global network of financial services companies that is extraordinarily convoluted. There are at least 175 Stanford entities with operations at more than 100 locations, including offices throughout the United States, Canada, Europe, Latin America and the West Indies.

“Stanford entities comprise a range of diverse businesses spanning securities brokerage, investment advisory services, gold coins and bullion, trust and fiduciary services, financial planning, merchant brokerage, venture capital, real estate development, investment banking, institutional securities research, securities trading, insurance strategies, commercial banking and alternative investments.”

The very history itself of the Stanford group of companies is not clear-cut. Sir Allen Stanford, he bears the title as the first American to be knighted by the Commonwealth nation of Antigua and Barbuda, had always claimed that the first Stanford company was founded in Texas in 1932 by his grandfather. It has however since transpired that Stanford’s main company located in Antigua, Stanford International Bank Ltd, was founded in Montserrat, where it was originally called Guardian International Bank until he incorporated it in the 1980s.

From then until this year, the Stanford group grew to such as scale that it most recently claimed 30,000 clients in 136 countries. Then, in April 2009, SIB entered into liquidation, and concerns of grave criminal activities were uncovered. Two months later, SIB’s chairman and sole shareholder, Stanford, was himself arrested and charged with multi-million dollar fraud and of personally looting some $1.6bn in undisclosed loans from SIB under a complicated investment swindle known as a Ponzi scheme. He is also now under investigation from the Federal Bureau of Investigation for his alleged involvement in large scale money laundering for the notorious Mexican drug cartel Cártel del Golfo.

All SIB’s assets are now frozen, while investigations continue to ensure all assets are protected for the benefit of investors. Associated company Stanford Trust Company Ltd (STC) remains in receivership whilst the receiver-managers continue their investigation into its affairs.

As the estate of Stanford entities includes a number of companies across the world and assets across a wide array of industries, some governments are actively attempting to secure companies and assets in their own jurisdictions. The government of Antigua in particular has an interest in the deposition of Stanford companies as they employ over 10% of the local population. The High Court of Justice of England and Wales has recently ruled that the centre of main interest of SIB is Antigua and Barbuda and not the United States and, as such, Vantis BRS, as Antiguan liquidator, is now formally recognised in the United Kingdom (UK) as the party to whom control of UK assets of SIB should be passed. This is a great step forward for SIB investors eager to get their money back, and Vantis BRS is pursuing similar judgements in other territories to further speed up the process of asset recovery.

Nigel continues: “Our approach will be a necessarily lengthy one – it may take a number of years to complete the asset identification and recovery work. To date a deficiency of some £6.7bn has been discovered, which means that restoring the losses to all victims will be a challenging, arduous and protracted process.
“We are dealing with enquiries at all hours, sometimes from extremely distressed stakeholders who may literally have lost their livelihoods, so our team is committed to being as understanding and supportive as possible. The diverse range of stakeholders is made up of an international community of investors, depositors, relevant official authorities, advisers, interest groups and the media, and we take very seriously our responsibility to keep them all informed at each appropriate stage.”

Communications initiatives have included regular and direct correspondence with primary stakeholders of SIB and STC including investors and depositors; an established resource area on the Vantis plc website with regularly updated FAQs and information on the status of the case; a new dedicated online claims management system for investors of SIB to formally register their claims while assets remain frozen; and a comprehensive international media outreach programme to keep the media updated with regular briefings. Vantis spokespersons have accordingly appeared in some of the world’s key media commenting on the case and the latest news connected to it, and the company is fully prepared to answer enquiries or requests for information via www.vantisplc.com/stanford.

Nigel Hamilton-Smith, client partner, Vantis Business Recovery Services,
tel: +44 (0) 20 7467 4000