'Stanford Refugees' Finally Get Money Back

by Gwen Moritz  on Monday, Mar. 30, 2009 12:00 am  

Andrew and Susan Meadors of Little Rock waited more than a month for the return of assets frozen in the collapse of Stanford Financial Group.

(In fact, Susan Meadors said, when convicted Ponzi schemer Bernard Madoff was arrested in December, "Andrew looked at me and said, 'What if Sir Allen Stanford is the next one?'")

Still, the Meadorses liked and trusted Alguire, and he fixed them up with individual retirement accounts, self-employed pension funds and a trading account. Meadors insisted that the securities in his trading account be held by a custodian, Pershing LLC. "I'm a certified risk manager, and I don't do into things lightly," he said.

He was offered CDs in Stanford International Bank in Antigua, where Stanford also controlled the Bank of Antigua, but he didn't jump at something that sounded "too good to be true." Meadors said he thought $100,000 was the minimum investment required for the CDs, which reportedly were paying 8 percent and higher.

The Peck Family Trust apparently bought three CDs; the lawsuit Hannah Kay Peck filed in U.S. District Court in Little Rock included no dollar signs but listed three CD account numbers as well as an IRA account number.

In the complaint, Peck said her Stanford adviser, Mike Arthur, "promised Ms. Peck that the CDs would have a significantly higher rate of return than rates available through CDs offered by traditional banks and would be properly insured to safeguard Ms. Peck's assets." She claimed she also relied on statements made by Matt McDaniel and Heath Stevens.

Alguire, Arthur and Stevens didn't return calls seeking comment; McDaniel declined to comment.

Like a Novel
The Peck complaint said Peck discovered that her deposits were "completely depleted" on Tuesday, Feb. 17, the day the SEC sued Allen Stanford and the Stanford Group. But Andrew Meadors had started to sweat the previous Saturday, Valentine's Day.

He picked up that morning's Wall Street Journal and saw a headline at the top of page B1: "Stanford Financial Gets More Scrutiny." (The previous day, the Journal had reported Stanford Financial Group's confirmation that it was the subject of an investigation by the SEC, the Financial Industry Regulatory Authority and the Florida Office of Financial Regulation, but that story had been buried on page C6.)

Meadors called Jim Alguire, who was at Disney World with his family. Alguire, Meadors said, told him that Stanford was just getting some bad PR. But by the following Tuesday, it was clearly much more than that.

"Our friend Jim's life has changed dramatically, and this thing is like a bad John Grisham novel," Meadors said, and then corrected himself. "Or a good John Grisham novel, if you like action, money, deception, the Caribbean."

The collapse of the stock market last fall, which exposed Madoff's fraud, had caught up with the Stanford Financial Group. Meadors quoted billionaire investor Warren Buffett: "'When the tide is out, you see who has been swimming about naked.' Sir Allen Stanford needs some swim trunks."

For a month, the Meadorses attempted to get their assets back out of Stanford – something Andrew thought should have taken no more than a day or two while the receiver, Dallas attorney Ralph S. Janvey, determined that client assets held by Pershing didn't belong to Stanford.

 

 

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