By a 3-0 vote, the 5th U.S. Circuit Court of Appeals rejected a settlement requiring insurers to pay $65 million to a court-appointed receiver for companies once run by Allen Stanford, the Texas financier serving a 110-year prison term for running a large Ponzi scheme.
The court ruled that the judge who approved the accord lacked authority to void or release some claims against the insurers, including underwriters at Lloyd’s of London, and bar further legal challenges over their policies and Stanford’s companies.
Once considered a billionaire but later declared indigent, Stanford, 69, was convicted of fraud by a Houston jury in 2012 over what prosecutors called a $7.2 billion Ponzi scheme that lasted two decades. Prosecutors said Stanford sold fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank and used investor money to make risky investments and fund a lavish lifestyle.