Hearing in Stanford case set over bankruptcy issue

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by Associated Press

wfaa.com

Posted on February 11, 2010 at 11:10 AM

Updated Thursday, Feb 11 at 11:10 AM

DALLAS -- Some investors allegedly defrauded by jailed Texas financier R. Allen Stanford are trying to get his businesses put into bankruptcy.

U.S. District Judge David Godbey could rule on the bankruptcy issue at a federal court hearing in Dallas on Thursday.

The government accuses Stanford of running a $7 billion Ponzi scheme by promising inflated returns on certificates of deposit at his Antiguan bank. He also is accused of skimming more than $1 billion for personal use.

Stanford, who is jailed in the Houston area on similar criminal charges, denies the allegations.

Attorney Greg Blue says placing the companies in bankruptcy would give every fleeced investor a voice in a potential recovery. Receiver Ralph Janvey, who was appointed by the court to return as much money as possible to investors, opposes bankruptcy.

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