Investors in a $7 billion Ponzi scheme orchestrated by former Texas tycoon R. Allen Stanford could finally begin getting back some of what they lost in the next few months, after a recovery process that has dragged on for more than four years, the Associated Press reported. Investors, some of whom lost their life savings, will see only a pittance of what they put into the scheme, but "the process got a boost this past week as parties that had been battling each other for control of about $300 million in frozen foreign bank accounts and other assets once owned by Stanford reached an agreement to work together."
Ponzi scheme involves money from new investors used to pay old ones. Prosecutors said Stanford persuaded investors to buy certificates of deposit or CDs, from his bank on the Caribbean island nation of Antigua, only to use that same money money to fund a string of failed businesses, to bribe regulators and pay for his lavish lifestyle.
Stanford was convicted last year and sentenced to 110 years in prison. His empire spanned from the U.S. to Latin America and the Caribbean. After his empire collapsed, a U.S. judge in Dallas and an Antiguan court appointed people to try to recover assets. The U.S. Justice Department also undertook its own effort.
British retiree Kate Freeman, who lost $820,000 in Stanford's scheme, said the agreement will provide the liquidators in Antigua needed funds to pursue lawsuits against individuals and organizations who aided with Stanford's fraud.
"The Antiguan liquidators have retained control of $227 million in assets, mostly in land once held by Stanford, said Edward Davis Jr., a lawyer for the Antiguan liquidators. That money won't be available for distribution until the land is sold," the AP reported.
The amount investors will ultimately get back will likely to be about 1 percent of what they initially put in before Stanford's elaborate Ponzi scheme, the AP said.
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