What's happening to Robert Stanford's victims and their money?

Sir Robert Allen Stanford, not exactly a name that one would associate with a Ponzi scheme. However, the financier and philanthropist has been charged with fraud for operating a $7 billion Ponzi scheme - which has stretched across continents and social classes. Stanford has spent the past week in jail and is set to face a judge today, who will determine if Stanford will stay in jail while he awaits trial.

This is just the tip of the iceberg however, as the story continues to unfold, playing out like a Hollywood tragicomedy. Today, police in Antigua and Barbuda arrested Leroy King on U.S. charges related to the Ponzi scheme. King is the administrator of the Financial Services Regulatory Commission for the Islands and was taken into custody today. King was dismissed from the position last night.
Let's first look at the plight of the people who were scammed by Stanford. There are many people, but some high-profile people who were scammed have admitted their mistake, including former major league pitcher Greg Maddux, former Yankee outfielder Bernie Williams, current Yankees Johnny Damon and Xavier Nady, current Red Sox J.D. Drew and Jacoby Ellsbury, Mets pitcher Mike Pelfrey, Angels pitcher Darren Oliver, and Mariner Adrian Beltre . The problem for these players is that their assets have been frozen by the Securities and Exchange Commission (SEC) and they are being managed by Ralph S. Janvey. The athletes withdrew their money from Stanford International Bank in Antigua before the SEC closed the bank in February. This led to Janvey laying claim to "their combined principal of $9.2 million and interest of $300,000."

While the athletes are not considered participants in the fraud, Janvey has demanded that the money not be released to the sports figures. This isn't necessarily a problem for the ball players, but what about the other investors? This situation has scared some, including many Baton Rouge investors that have lost millions in retirement savings with Stanford. Should Janvey try to get any returns back from them, they could lose "much more than they received." In fact, Kim Scullin of Baton Rouge said that her family lost "hundreds of thousands" of dollars placed in Stanford's failed Caribbean bank. Scullin took some money out of those deposits to pay for medical expenses and would have to sell her house should Janvey try to recoup any of the cash.

Unfortunately, Stanford's crime is not victimless. The plight of the ballplayers may bring to light that there are regular, everyday people that were duped as well - and will now be suffering quite a bit thanks to Mr. Stanford's actions. As Johnny Damon said, "We have an American Express and no limit," which is how he is paying his bills right now. How about the people with limits? Or the people without credit cards?

There are people out there who aren't pro ball players, and they need their money. Unfortunately, thanks to Mr. Stanford and Mr. King, that isn't going to happen.

Increase your money and finance knowledge from home

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

What is Inflation?

Why do prices go up?

View Course »

Add a Comment

*0 / 3000 Character Maximum