Kennedy, colleagues raise concerns over DOJ’s response to $7 billion Stanford Trust Ponzi scheme

WASHINGTON - Sen. John Kennedy (R-La.) today joined colleagues in urging Attorney General Merrick Garland and the Department of Justice (DOJ) to coordinate with the victims of the Stanford Trust Ponzi scheme.

More than 1,000 Louisianians from Baton Rouge, Covington and Lafayette lost large sums from their life savings due to Allen Stanford's fraud, which involved Stanford's selling roughly $7 billion worth of illegitimate certificates of deposit from his offshore bank. In 2020, Kennedy led an amicus brief on behalf of victims.

Kennedy has also urged Securities and Exchange Commission Chairman Gary Gensler to ensure that any potential attorney fees and settlements for victims are fair and reasonable.

"We write to you on behalf of the Louisianans and Texans who were defrauded and have yet to be made whole by Allen Stanford and the Stanford International Bank. In 2019, members of Congress wrote a letter urging that Société Générale provide restitution to the victims of Allen Stanford for its involvement in facilitating the Ponzi scheme. Société Générale held $210 million in frozen assets connected to the Stanford Ponzi scheme, which it refused to release to Stanford's victims. The undersigned were emphatic that this money belonged to the victims and should be returned to them immediately. There was a follow-up letter a year later expressing our frustration at the lack of progress and the bank's refusal to engage with the victims of the Ponzi scheme," the senators wrote.

"Separately, members of Congress reached out to Toronto-Dominion Bank regarding its involvement with the Stanford Ponzi scheme. The undersigned highlighted troubling details relating to the bank's relationship with Allen Stanford and indicated that such lapses in compliance oversight could facilitate money laundering and other fraudulent activities. The undersigned demanded that Toronto-Dominion Bank engage with Stanford's victims to seek a swift resolution to the matter," they continued.

"The Stanford Financial Receiver raised similar concerns and asked the Department of Justice to investigate Toronto-Dominion Bank for its involvement with the Stanford Ponzi scheme. We have been informed that the Stanford Financial Receiver received no acknowledgement regarding its requests. If true, this appears to be a break with the Department's prior practice to maintain open lines of communication and coordinate with victims' groups," the senators concluded.

The senators are seeking answers from the DOJ regarding what communications it has had with the Stanford Financial Receiver and whether or not the Department considered seeking a restitution penalty as part of the settlement with Toronto-Dominion Bank regarding its Bank Secrecy Act and money laundering violations.

The full letter is available here.