Bankruptcy Law

Stanford Receiver Sues Greenberg and Hunton Firms, Says Lawyer's Work Helped $7B Ponzi Scheme

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A court-appointed receiver representing victims of a $7 billion Ponzi scheme for which former billionaire R. Allen Stanford is now serving a 110-year prison term has sued two well-known law firms.

In a federal suit filed Thursday in Dallas that seeks class action status, receiver Ralph Janvey and several individual investors allege that an attorney, who was formerly a partner of both Greenberg Traurig and Hunton & Williams during the 20 years that he served as outside counsel for Stanford Financial Group, performed legal work that helped Stanford perpetrate the fraud, according to Courthouse News, the Houston Chronicle and Reuters.

However, international banking lawyer Carlos Loumiet, who now works for a different law firm, in Miami, Fla., is not individually named as a defendant in the suit and said in an email to Reuters that he did nothing wrong and has never represented a client he knew to be involved in illegal activity. His two former law firms also said they had no responsibility for Stanford’s fraud. Hunton described the legal action as an “overreach” and Greenberg, noting multiple prior lawsuits and class actions, as well as prior claims against other law firms and accountants, called it “merely plaintiffs’ newest attempt to pry open a deep pocket.”

“Stanford could not have perpetrated this global mass fraud on his own. He needed corrupt regulators in his chosen offshore jurisdiction of Antigua, shady accountants, and skilled and complicit lawyers to help him,” the complaint contends.

It said Loumiet helped Stanford establish an Antigua base and offices in the United States that sold to investors so-called certificates of deposit from an Antigua bank that were eventually found to be worthless. Loumiet is also blamed for encouraging the career of fellow attorney Yolanda Suarez, who became general counsel at Stanford Financial Group and is named as a defendant in the suit, which describes her as Stanford’s onetime chief of staff. Her attorney did not immediately respond to a request for comment from Reuters.

In a written statement provided to the Chronicle, attorney Ed Snyder, who filed the suit for the plaintiffs, said Loumiet “helped design the basic architecture of the Ponzi scheme by helping Stanford establish and operate unlicensed foreign bank offices in the U.S. and essentially hijacking the sovereign island nation of Antigua through the use of political corruption, loans made with funds stolen from Stanford’s investors, and even writing the laws that governed Stanford International Bank’s operations.”

The South Florida Business Journal also has a story.

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