- Anthony Weiner on his current sexting habits: ‘None of your business’
- Producers eye Capitol Hill for latest reality TV hit
- No selfie awareness: Obama, Biden mug for Instagram as Ukraine implodes
- Putin to Snowden: We don’t collect droves of data on everyone like the U.S.
- Clemson football’s new opponent: Atheists upset with player prayer, Bible study
- Toronto Mayor Rob Ford’s re-election launch party will be ‘history in the making,’ brother says
- Louisiana group hits back at Sen. Mary Landrieu campaign ad with ‘Actress Mary’ spot
- Brain surgery victim struggles with Obamacare: ‘It’s scary’
- Pro-Russian forces storm Ukrainian national guard base; 3 killed
- Joe Biden’s first Instagram pic mocked as shill for sunglass ad
EXCLUSIVE: Fed seeks millions from ballplayers in Ponzi scheme
The lawyer trying to recover the money from R. Allen Stanford’s purported Ponzi scheme wants seven current and former Major League Baseball stars who had invested with the accused swindler to turn over millions of dollars, mostly of the players’ own money.
Ralph S. Janvey, whom the Securities and Exchange Commission appointed as the “receiver” in the case, wants to take $9.5 million from the players, an amount that mostly consists of their initial investments, so that the athletes’ money can be split up among all of Mr. Stanford’s purported victims.
“The fact that the [ballplayers] are innocent investors and committed no wrongdoing does not entitle them to retain proceeds received from the fraudulent” scheme, lawyers for Mr. Janvey wrote in a filing last week with the U.S. District Court in Dallas.
Gene R. Besen, an attorney for all seven players, declined to comment on the move by the receiver.
Targeted by the filing are accounts at Pershing, a clearing broker used by Mr. Stanford and where brokerage accounts were held by retired pitcher Greg Maddux, retired New York Yankees slugger Bernie Williams, current Yankees outfielder Johnny Damon, Boston Red Sox outfielder J.D. Drew, Texas Rangers outfielder Andruw Jones, Tampa Bay Rays first baseman Carlos Pena and Jay Bell, a shortstop who played for several teams before retiring in 2003.
David B. Smith, a Virginia lawyer who is co-chairman of the Forfeiture Abuse Task Force of the National Association of Criminal Defense Lawyers, said Mr. Janvey’s filing is “unusually aggressive.”
The players are not accused of wrongdoing, yet are being asked to turn over huge amounts, including the legitimately made money they invested at the start, not simply their profits, Mr. Smith noted.
“You get into these philosophical questions of what is really fair?” said Mr. Smith, who has represented the victims in several Ponzi scheme cases. “None of the cases that I have been involved in follow this scenario.”
Mr. Stanford pleaded not guilty Thursday in federal court in Houston to charges contained in a 21-count indictment that say he ran a $7 billion Ponzi scheme. Judge David Hittner on Friday ordered him held without bond pending a hearing Monday morning.
Authorities say Mr. Stanford sold fraudulent “certificates of deposit” that promised impossibly high returns.
In reality, investigators say, Mr. Stanford was simply running a Ponzi scheme, in which earlier investors were paid with money from new investors. Mr. Stanford also took much of the money for himself, authorities say, including a $1.6 million “personal loan” from money he received from investors.
The ballplayers were among the investors who just happened to make money from the apparently fraudulent “certificates of deposit.” The move against them is the first in which Mr. Janvey has sought to retrieve Stanford money paid out to innocent investors.
Mr. Janvey previously sought to seize $40 million from 66 financial advisers the government doesn’t accuse of wrongdoing, but who had been employed by Mr. Stanford. He has also asked a judge for permission to sell property belonging to Mr. Stanford.
Mr. Janvey and his lawyers at the Baker Botts firm, which made the filing, did not return phone and e-mail messages left by The Washington Times.
About the Author
Ben Conery is a member of the investigative team covering the Supreme Court and legal affairs. Prior to coming to The Washington Times in 2008, Mr. Conery covered criminal justice and legal affairs for daily newspapers in Connecticut and Massachusetts. He was a 2006 recipient of the New England Newspaper Association’s Publick Occurrences Award for a series of articles about ...
TWT Video Picks
By John R. Bolton
Reality calls for attaching Gaza to Egypt and the West Bank to Jordan
- 'Culture of intimidation' seen in Nevada ranch standoff
- Removal of military gear limits options for U.S., NATO in Ukraine
- IRS emails reveal discussion with Justice about suing nonprofits for election activities
- Rand and Ron Paul ride to the rescue for Bundy in Nevada standoff with feds
- NAPOLITANO: Hope for the dead and freedom for the living
- CURL: The state of the Union worse than you thought
- PETA officials collide with deer
- CNN op-ed claims right-wingers 'more deadly than jihadists'
- BOLTON: A 'three-state solution' for Middle East peace
- U.S. Navy to turn seawater into jet fuel
Celebrity deaths in 2014