DALLAS – On Sept. 7 three law firms, Strasburger & Price, Castillo Snyder and Neligan Foley, announced settlements worth $240 million in recoveries for the more than 18,000 victims of a massive Ponzi scheme, orchestrated from Houston by jailed financier Allen Stanford, who is currently serving a 110-year sentence in federal prison in Florida.
The Stanford Ponzi scheme is recognized as the second largest Ponzi scheme in U.S. history, with more than $5 billion in investor funds lost.
According to a press release, the important milestone was reached with the law firms’ filing for court approval of a $120 million settlement agreement with London-based insurance brokerage firm Willis Group, one of the largest insurance brokerages in the world.
The Willis settlement follows on the heels of the approval by the Dallas federal court overseeing the Stanford cases of prior significant settlements achieved by the team of lawyers representing Stanford’s investor victims in litigation that has been pending for in many cases seven years, including settlements for $24 million with Kroll Inc., $40 million with BDO Seidman and $35 million with New York-based law firm Chadbourne & Parke.
Strasburger partners Judy Blakeway and David Kitner served as co-lead counsel in several of the cases. The litigation team also included Dallas-based bankruptcy counsel Doug Buncher of Neligan Foley LLP.
“With the court’s approval of these recent settlements, the Stanford investors will receive their largest recovery to date in what has been an ongoing nightmare for them,” said Edward Snyder of Castillo Snyder, lead counsel in many of the cases. “This has been a long road for the victims, as well as for us. We have litigated these cases for over seven years now, including a successful appeal all the way to the U.S. Supreme Court.”
Willis was accused of aiding the Stanford fraud by providing letters to investors – mostly from Mexico and Latin America – vouching for Stanford and insurance policies held by Stanford, which helped convince investors that their investments were safe and insured.
“While this is an important step forward, there are multiple cases still pending, and we will continue to fight for the victims of Stanford’s fraud to maximize their recovery,” said Kitner.
If approved by the court, the settlement proceeds will be paid to the SEC Receiver for Stanford who will then distribute the funds to the 18,000 victims worldwide. To date, the investor victims have recovered only about 2.5 percent of their losses through the liquidation of Stanford’s remaining assets.