R. Allen Stanford investors trying to get back their money from his bank in Antigua may have to wait in line behind the U.S. Internal Revenue Service, which wants at least $226.6 million of any assets remaining. Stanford, a Texas financier, was accused of an alleged $8 billion Ponzi scheme just weeks after Madoff.
The IRS filed its motion on March 13 in the U.S. District Court in Dallas. That court is sorting out claims for the $1 billion in frozen assets that were seized last month. Frozen assets include customer accounts and gold coins and bullion.
Stanford's tax bill continues to swell as penalties and interest mount. He also hasn't filed his 2007 tax return, so back tax claims could go higher. Ralph Janvey, the court-appointed receiver, is expected to file a response to the 45 groups of investors that want to join the SEC's case against Sanford later today.
Janvey has released $4.1 billion in frozen Stanford investors accounts. Only certain accounts linked to executives and employees, the bullion division and accounts containing investments at Antiguan-based Stanford International Bank remain under the court-ordered freeze.
Stanford's personal assets were frozen by a federal judge in Dallas, who placed his U.S. operations into receivership. Stanford's attorney Chuck Meadows, told the judge on March 2 that Stanford denied the Ponzi-scheme allegations. Stanford invoked his rights against self-incrimination under the Fifth Amendment of the Constitution, according to court papers filed on March 11.
On Feb. 27, the parliament of Antigua and Barbuda voted to seize 254 acres of Stanford's land. The move was intended to preserve 80 jobs, according to a government news release. Antiguan financial authorities took over the Stanford-owned Bank of Antigua.
Like Madoff, Stanford avoided SEC scrutiny for a long time. Some think political favors may have helped to stall those investigations.
Lita Epstein has written more than 25 books, including Reading Financial Reports for Dummies.