HOUSTON (AP) — 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.
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 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.
"The freeing up of funds ... is a good thing," Angela Shaw, a Dallas-area woman who founded the Stanford Victims Coalition after three generations of her family lost $4.5 million in the fraud, said Friday.
In a Ponzi scheme, money from new investors is 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 then used the money to fund a string of failed businesses, bribe regulators and pay for his lavish lifestyle. Stanford, 62, was convicted last year on 13 fraud-related counts and sentenced to 110 years in prison.