The Laundry Man by Kenneth Rijock ( Penguin/Random House UK)

Monday, February 25, 2013


It is unthinkable that a central bank, and a sovereign state, would be sued in connection with a Ponzi scheme, but in the massive Stanford bank case, all courtesies have been swept aside. The Official Stanford Investors Committee, in apparent coordination with the court-appointed Receiver, Ralph Janvey, has filed a complex civil action* in US District Court in Texas, naming Antigua & Barbuda, the five East Caribbean banks that received possession of portions of the Bank of Antigua, thereby denying those assets to the Receiver, and the Eastern Caribbean Central Bank, which effectuated what the plaintiffs call a "brazen act of thievery." These are strong words, but they appear to fit the objective facts; reportedly, many millions of dollars of assets were allegedly fraudulently transferred, and are now out of the reach of the Receiver, who needs those funds to pay the victims of the Ponzi scheme.

There is also over $200m of debt owed to Stanford bank by Antigua; the "self-serving seizure" of the bank means that Antigua would be paying itself. Antigua allegedly participated in the fraud. Whether there is foreign sovereign immunity for Antigua, in this case, is an interesting issue that will certainly be explored and decided in advance of any trial.

The named banking defendants are;

Antigua Commercial Bank
St. Kitts-Nevis-Anguilla National Bank Ltd.
Eastern Caribbean Financial Holding Company Ltd.
National Commercial Bank Ltd.
National Bank of Dominica Ltd.

The claims for relief:

(1) Avoidance of Foreign Transfers to the Bank of Antigua
(2) Avoidance of Fraudulent Transfers, by Seizure of the Bank of Antigua.
(3) Conversion.
(4) Unjust Enrichment.
(5) An Accounting from the Bank of Antigua.
(6) An Accounting from the ECCB, as to the value of the Bank of Antigua.
This is only one of three major cases filed; we shall detail the others during this coming week. Remember, Antigua has never extradited its principal regulator, Leroy King, to face criminal charges in the US; these new civil suits, on top of that fact, could seriously affect the flow of business to Antigua's offshore financial services sector, and it will certainly result in increased Country Risk.

Could this new litigation actually threaten Antigua's fragile economy ? We cannot say, but I would certainly think that the country's leadership must be experiencing the legal equivalent of "Shock & Awe" this month.
* The Official Stanford Investors Committee vs. Antigua & Barbuda, et al, Case No.: 13-cv-0762-N (ND TX).

1 comment:

  1. Good post. We've posted a similar Antigua and Barbuda profile here:


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