Redistributing Stanford's Money

Alex Dalmady's friend Roberto is not out of the woods yet, even though he doesn't have any investments with Stanford any more. As Alex recalls:

It started back in October when my long-lost friend Roberto (I'll save his last name) called wanting me to help him with his portfolio... He commented that he had a good chunk of his assets in CDs at Stanford International Bank...
"Roberto", I said, "take your money out YESTERDAY". He did, albeit slowly, but by December he was out.

Or he thought he was out, anyway. There's a very good chance he might yet be clawed back in:

In addition to freezing Stanford's accounts, analyzing records and interviewing employees, Janvey will likely use so- called clawback litigation to force Stanford investors who cashed out early to return previous withdrawals, according to Goldberg. Such clawbacks are expected to be used in the Madoff case.

Janvey, here, is Ralph Janvey, Stanford's receiver. Goldberg is Michael Goldberg, a lawyer at Akerman Senterfitt in Miami, who confirms to me that he believes the Stanford recievership will be a tougher job than either Enron or Lehman. Yikes.

One interesting question is the degree to which Stanford's children and their mothers are going to get bailed in to this receivership. Bloomberg has details of one Florida court case in which Louise Sage Stanford, the mother of two of the billionaire's children (but never officially his wife) made a truly classic pronouncement:

"Needless to say, the children do not fly commercially for their travel," the lawyers said in the filing in state court in Miami.

The Bloomberg story is full of stuff like this:

Stanford, his girlfriend and their two children also once lived in the "Wackenhut Castle," a three-acre estate in a Miami suburb that the billionaire bought for $10 million...
The 18,000-square-foot, 57-room castle included a moat, tower, pub and a man-made cliff...
Stanford's girlfriend and his children moved out of the castle in June 2004 and into a 12,000-square foot home that they rented for $25,000 a month...
After the pair broke up, Stanford paid $850,000 a year in housing, food and private-school costs to ensure his children maintained their "privileged and luxurious lifestyle," his girlfriend's lawyers said in the March 2008 filing.
The amenities included a new Lincoln Navigator and driver available 24 hours a day, seven days a week to chauffeur the children, according to an October 2007 filing.

$850,000 a year might count as getting off cheap: Stanford's ex-wife, Susan J. Stanford, received $100,000 a month and a lot of perks:

The judge also gave Susan Stanford "free use" of her estranged husband's corporate jets, yacht and an estate in Antigua, according to the filing. She was also given use of a 7,000-square-foot Houston mansion valued at $2.5 million, a 2,803-square foot high-rise condominium unit valued at $1.3 million, two Mercedes and a 1998 Porsche Boxster sports car.

Is any of this property going to be liquidated for the benefit of Stanford's creditors? I do hope so, since substantially all of it constitutes ill-gotten gains. It's sad, but his children just might have to start flying commercial pretty soon.