Last year at this time, attorney Phil Preis was feeling optimistic that the 900 or so mostly Baton Rouge-based victims of the 2009 Stanford Group Ponzi scheme he represents might finally get some of their money back.
A federal judge in Texas had transferred to the U.S Middle District of Louisiana a class-action suit filed by Preis on behalf of the local victims against SEI, the company that had administered Stanford’s investments. Having the discovery process and pre-trial hearings take place in Baton Rouge would help expedite the long-running case, Preis thought at the time.
But last July, U.S. District Judge Bryan Jackson delivered a major blow to the claimants, essentially throwing the case out of court. In November, Preis appealed to the U.S. Fifth Circuit Court of Appeals. SEI’s lawyers filed a reply. Now, Preis is completing his response to that reply and expects to file it next week.
“After that, it will typically be 60 days before we know if the Fifth Circuit is going to hear oral arguments, and, if they do, it will be another 60 days before there’s a ruling,” he says. “So we’re looking at June at the earliest before we’ll know where things stand.”
For Preis and his clients in the suit— a group that invested their retirement savings as rollover IRAs into certain fraudulent CDs sold in Baton Rouge by Stanford Trust Co.—the setback has been the most disappointing to date. Most of his clients, he says, have given up on ever recovering a portion of the $250 million they collectively lost.
“Most of these people now are over 75,” he says. “Some don’t have the capability to keep fighting. Others don’t have any hope of recovery. It’s just a matter of a 10-year beat down.”
The class-action lawsuit is one of more than a dozen still wending its way through the courts more than a decade after federal investigators raided the offices of the Stanford Group, ultimately exposing an estimated $5 billion Ponzi scheme that sent the firm’s founder, R. Allen Stanford, to prison for life.
Other actions have proved equally difficult to resolve in favor of Stanford victims. Last summer, for instance, the Swiss government ordered Societe Generale Private Banking in Switzerland to return more than $100 million in stolen Stanford funds that have been squirreled away in the Swiss bank for more than a decade.
At the time, Louisiana’s U.S. senators, Bill Cassidy and John Kennedy, trumpeted the ruling, which they had pushed for on behalf of their constituents. But an attorney for the receiver in the case says the Swiss bank continues to push back with no money forthcoming anytime soon.
“The money is still stuck in Swiss proceedings with no clear end date in sight,” attorney Kevin Sadler of BakerBotts says. “SocGen is appealing every ruling adverse to them.”
[polldaddy poll=10498170]
