Freitag, 26. Februar 2010

Allen Stanford's Investors Want Alleged Swindler's Political Donations Returned

February 26, 2010
Democratic and Republican lawyers are scrambling this week to figure out how to contend with an unusual lawsuit filed by the Texas official tasked with recovering money spent by Allen Stanford, the alleged mastermind of an $8 billion Ponzi scheme.

More than $1.6 million from Stanford and his businesses went to fund Democratic and Republican Congressional campaigns between 2000 and 2008, and now the investors want the political parties to give that cash back, according to a lawsuit filed in U.S. District Court.

The suit could be an important one to watch, because of a recent spate of alleged swindlers who also happen to be prolific political donors. Most notable was Florida lawyer Scott Rothstein, convicted last month in a $1.2 billion Ponzi scheme. He and his law firm had parceled out more than $600,000 to politicians in the past five years.

The case against the party committees is also notable because it is built, in part, on an unusual rationale -- the contention that Stanford didn't actually get anything in return for his contributions. Under a quirk of the law, if the lawyers for the political parties can't show that he did receive some tangible benefit, they may have to come up with the money. And it's a point they'll have a hard time contesting, since they can't exactly argue that he bought influence with his money.

Ralph S Janvey, the lawyer who filed the case in Dallas Tuesday, said he began requesting the money in writing a year ago and continued making written requests until earlier this month. The party committees "have ignored these requests, and, as a result, the Receiver has been forced to file this lawsuit seeking the return of the funds," Janvey wrote.

Overall, the Democratic Senatorial Campaign Committee received the largest share of the Stanford money -- $950,500 – according to the Texas lawsuit. The National Republican Congressional Committee received $238,500, the Democratic Congressional Campaign Committee got $200,000, the Republican National Committee took in $128,500, and the National Republican Senatorial Committee received $83,345.

Lawyers and press aides for several of the political committees initially told ABC News they thought the case would be dismissed right away, and they saw little chance they would have to give the money back.

"The money's been spent. It's not going to be returned," one party official said, speaking on the condition he not be named because the litigation is pending.

But after spending more time reviewing the situation, several campaign finance lawyers told ABC News that this could actually be a far more tricky case than it initially seemed.

Under election laws, there are only a small handful of legal reasons a political committee would be forced to return contributions. They would have to refund money if it came from a corporation, came from a foreign source, or was funneled through an illegal straw donor arrangement, said Lawrence M. Noble, a former chief counsel to the Federal Election Commission.

"On the other hand, if the receiver has an independent legal basis for getting the money back, I don't think the party committees would be treated any differently than any other recipient of Stanford funds, whether it is a charity or a business," Noble said.

And that, potentially, is where the trouble starts for the Democratic and Republican committees, said Jan Baran, a Washington election lawyer.

There's a separate set of laws covering something called a "fraudulent conveyance," Baran said. Victims of swindling are entitled to recover any goods that were obtained with their swindled money. If the money was donated or given away rather than used to obtain something tangible, the victim can ask for the money back rather than tangible items. Any charity or other third party that has received money from a swindler may then be compelled to return that money to the person from whom it was originally obtained.

Hence one of the key arguments in Janvey's court filing -- that the political parties to which Stanford donated did not provide anything tangible in exchange for the allegedly swindled funds. They are more like charities that have been given swindled money and must return it.

Just because Janvey's legal argument "is unprecedented, that doesn't mean it will be unsuccessful," Trevor Potter, the campaign lawyer who represented Sen. John McCain during his presidential bid, said in an interview.

Lawyers for the five party committees involved in the case either declined to comment or did not respond to emails and phone calls. They can't argue that Stanford's donations bought him influence, but they are known to be checking if the money got him any tangible perks, like access to a concert or a sporting event or an exclusive gala at one of the party conventions.

Baran, who used to represent Republican congressional committees, said he suspects the party lawyers will try to reach a settlement with Janvey, rather than risk seeing this case resolved by a judge.

"I think Stanford's [alleged] victims are going to get some of the money, if not all of it," Baran said.

Visit the Stanford International Victims Group - SIVG official forum

Dienstag, 23. Februar 2010

Stanford Receiver Sues Political Committees

February 23, 2010
The political stakes in the Stanford Financial scandal are getting higher.

The court-appointed receiver who is tracking down the billions of dollars missing in the alleged Ponzi scheme - Dallas attorney Ralph Janvey - has filed suit against the major parties' congressional campaign committee seeking the return of $1.6 million in contributions they received from company founder Allen Stanford and his top lieutenants.

The move comes less than two weeks after Janvey demanded the committees return the funds, but received no response.

The suit, filed in federal court in Dallas, names the Democratic Senatorial Campaign Committee, the National Republican Congressional Committee, the Democratic Congressional Campaign Committee, the Republican National Committee and the National Republican Senatorial Committee.

The suit says the committees "have no legitimate right" to keep the contributions, which Janvey says belong to Stanford's investors.

The suit says the Democratic Senatorial Campaign Committee received the largest amount of tainted contributions, $950,000. The National Republican Congressional Committee follows with $238,500; the Democratic Congressional Campaign Committee received $200,000, the Republican National Committee got $128,500 and the National Republican Senatorial Committee took in $83,345. None of the committees was immediately available for comment.

Janvey has thus far stopped short of suing individual members of Congress, from whom he is seeking another $200,000 in contributions. Several of the congressmen, including Texas Republican Pete Sessions and New York Democrat Charlie Rangel have said they donated their Stanford-linked contributions to charity.

In addition to Janvey's lawsuit, the Miami Herald reported in December that federal prosecutors are investigating whether Stanford's lavish campaign contributions were an improper attempt to buy influence.
Stanford Receiver Sues Democratic, Republican Groups
Democratic and Republican political groups were sued for the return of more than $1.6 million in money investors entrusted to Stanford Financial Group before the company's principals were charged with a $7 billion fraud.

Court-appointed receiver Ralph Janvey claims the Republican National Committee, the Democratic and Republican senatorial committees and each party's congressional campaign groups have refused to return the money, according to a complaint he filed Feb. 19 in federal court in Dallas.

U.S. prosecutors in June announced separate charges against company founder R. Allen Stanford and chief financial officer James Davis for their roles in what the government said was a $7 billion securities-fraud scheme.

"The committee defendants did not furnish any consideration whatsoever for the funds they received from Stanford, Davis and the Stanford Financial Group," according to Janvey's complaint. "Consequently, they have no legitimate right to retain the funds."

Stanford and others were also sued last year by the U.S. Securities and Exchange Commission, triggering Janvey's appointment to oversee Stanford's businesses and recoup money for investors. Stanford has denied wrongdoing.

Davis pleaded guilty in August to three felony counts. His lawyer, David Finn, said then that his client would cooperate with federal investigators.

The Democratic Senatorial Campaign Committee received $950,500, according to Janvey. The organization didn't immediately reply to an e-mailed request for comment on the lawsuit.

Sara Sendek, a spokeswoman for the Republican National Committee, didn't immediately return a call seeking comment.

The political contributions case is Janvey v. Democratic Senatorial Campaign Committee, 10cv346, in the Northern District of Texas (Dallas).

Visit the Stanford International Victims Group - SIVG official forum

Montag, 22. Februar 2010

Suit filed to force lawmakers to return Stanford contributions

February 22, 2010
Allen Stanford
Thousands of families lost their life savings when, investigators say, they uncovered a massive fraud centered around billionaire Allen Stanford.

Now, the man assigned to defend the victims says money they are due is being withheld by an unlikely source: Politicians.

They're refusing to give back more than $1.8 million they received from Stanford, now accused of being a criminal.

Arley and Marsha Carter worked hard to build the family business that eventually let them retire in the country.

Then came news of the massive ponzi scheme involving their money.

They weren't alone; thousands of other investors were also exposed.

"A lot of sleepless nights," Marsha Carter told News 8 during an interview last March. "It's hard not to worry.

The Carters were hopeful that federal investigators would find some money still left in Stanford accounts. But on Monday, they learned that it is government leaders who are still holding on to some of those funds - and they're angry.

In a lawsuit filed in federal court, attorney Kevin Sadler, representing the court-appointed receiver, contends that political committees from both political parties are holding on to $1.6 million contributed by Allen Stanford and his affiliated businesses - money they retained even as Stanford investors suffered.

"One lady and her husband had invested, and she was having problems just getting his funeral taken are of," Marsha Carter said in the 2009 interview.

The receivers also published the names of individual campaigns that have not returned the money. Thus far, they have not been sued.

In Texas, the list includes KPAC, the political action committee affiliated with Sen. Kay Bailey Hutchison; Sen. John Cornyn; and U.S. Representatives Pete Sessions, Charles Gonzalez, and Pete Olson.

Representatives Kevin Brady, Lamar Smith, Sam Johnson, Joe Barton and Michael McCaul are also on the list.

KPAC - along with the Cornyn, Sessions, Brady, and Johnson campaigns - told News 8 the money went to charity.

But Sadler equated that to saying, "I don't have the money anymore because I gave it to someone else."

He also points out that the gifts to charities do nothing for the victims, many of whom are seeing their golden years become their most trying years yet.

Late Monday, Rep. Olsen said he will return the Stanford funds to the receivership.

Visit the Stanford International Victims Group - SIVG official forum