By Jonathan Stempel
(Reuters) - A court-appointed receiver has recouped more than $1 billion for victims of Texas financier Allen Stanford's Ponzi scheme, the largest by dollar amount other than Bernard Madoff's fraud, the receiver's lawyers said on Monday.
The threshold was crossed when Ralph Janvey, the receiver for Stanford Financial Group, received $65 million from a June 2016 settlement with insurers including Lloyd's of London, which won final court approval in January after years of litigation.
Janvey expects to distribute money from the settlement in the first quarter of 2022. As of April 29, he had received court approval to distribute about $550 million, and had distributed $443 million.
Once considered a billionaire but later declared indigent, Stanford, 71, is serving a 110-year prison sentence following his 2012 conviction for running a $7.2 billion Ponzi scheme affecting approximately 18,000 former investors.
Prosecutors said Stanford sold fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank, and used investor money to make risky investments and fund a lavish lifestyle.
The fraud lasted about two decades, and was uncovered in February 2009.
"When the receivership started, the receiver found only $63 million in a bank that was supposed to be holding more than $7 billion," Kevin Sadler, a Baker Botts partner representing Janvey, said in an interview. "It has taken more than 12 years, but getting to $1 billion is a significant achievement."
More recoveries are possible.
Janvey is defending against appeals from a $124.9 million judgment he won against Colorado billionaire Gary Magness.
He is also working with the Official Stanford Investors Committee on a $4 billion lawsuit against five former Stanford banks including HSBC, Societe Generale (OTC:SCGLY) and TD Bank.
Last month, U.S. District Judge David Godbey in Dallas rejected HSBC's and Societe Generale's bids to dismiss that case.
Recovery efforts from Madoff's Ponzi scheme have recouped more than $18 billion for victims.
Madoff died in April at age 82 while serving a 150-year prison term. His fraud was uncovered in December 2008.