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VOL. 124 | NO. 170 | Monday, August 31, 2009

Stanford Receiver Wants Money Back from Advisers – Including Stanley

By Andy Meek

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The court-appointed receiver in charge of what remains of jailed Texas financier R. Allen Stanford’s business is going after money former Stanford advisers made from selling bogus certificates of deposit.

Several of the advisers worked in Stanford’s plush brokerage office in the East Memphis Crescent Center, including former State Sen. Paul Stanley. A Germantown Republican, Stanley resigned his seat in the Legislature a few weeks ago in the wake of an intern sex scandal.

Of more than 250 financial advisers listed in an amended complaint filed this week by Ralph Janvey, a Dallas attorney operating as Stanford’s receiver, six of them from Memphis got more than $3 million in CD proceeds, according to Janvey.

The money Janvey is seeking to bring back into the receivership estate was paid as commissions and other compensation for the sale of Stanford’s certificates of deposit. Memphis advisers and their CD proceeds listed in Janvey’s complaint include:

- Jon Barrack: $291,753

- Norman Blake: $897,799

- Charles Brickey: $563,816

- Chuck Hughes: $301,074

- Scott Notowich: $1.1 million

- Paul Stanley: $64,351

The amended complaint Janvey filed in Texas Friday seeks to recover about $134 million from 253 former financial advisers.

“Money that new investors were deceived into paying to purchase CDs funded the Stanford network; lavish offices and appointments; extravagant lifestyles for the individual defendants and their families; employees’ salaries; loans, commissions, bonuses and … payments in the form of interest and redemptions to unwitting investors,” the complaint reads. “This fraud endured, in part, by incentivizing a sales force with big commissions for selling CDs.”

The complaint was filed one day after Stanford’s former Memphis-based chief financial officer agreed to a plea deal with prosecutors in the Stanford case.

Included in James Davis’ 23-page plea agreement are details bolstering prosecutors’ claim that the Stanford business empire was built on duping investors, falsely inflating company balance sheets and promising CD rates of return Stanford couldn’t reasonably hope to achieve.

Also Friday, Janvey asked a Texas court for permission to sell "Little Eagle," a 50-foot yacht seized from Stanford's chairman, for $150,000. The yacht currently is docked in a marina in Fort Lauderdale, Florida.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 56 289 2,908
MORTGAGES 55 226 2,009
FORECLOSURE NOTICES 14 51 326
BUILDING PERMITS 108 1,002 6,703
BANKRUPTCIES 42 248 1,225
BUSINESS LICENSES 0 115 606
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0