Businessman Stanford’s daughter could face contempt charge in fight to keep $1.3M condo

Stanford’s daughter fights for $1.3 million condo

DALLAS — The daughter of jailed Texas businessman R. Allen Stanford must appear in federal court to show why she should not be held in contempt for fighting the sale of her $1.3 million Houston condominium, a judge ruled Wednesday.

Stanford’s daughter Randi argued in court papers that she is entitled to stay in the 2,800 square foot condo because it was a gift from her father, who is accused of leading a $7 billion Ponzi scheme.

Randi Stanford said the condo is not part of the allegedly tainted assets seized by the government and accused the receiver in control of her dad’s businesses of “Gestapo-like tactics.”

The court-appointed receiver, Dallas lawyer Ralph Janvey, has pressed for a contempt of court hearing, arguing in a motion that Randi Stanford has “refused to cooperate with the receiver’s reasonable efforts to take control of the condo.”

Judge David C. Godbey on Wednesday set a show cause hearing for Jan. 28.

Randi Stanford’s lawyer did not return a message left by The Associated Press.

The Securities and Exchange Commission accuses Allen Stanford of promising inflated returns to about 28,000 investors on certificates of deposit at his Antiguan bank. The SEC also accuses him of skimming more than $1 billion to fund a lavish lifestyle.

Allen Stanford, who faces a civil suit in Dallas and is jailed in the Houston area on similar criminal charges, denies the allegations.

Janvey maintains the condominium falls under his authority because it was bought by Allen Stanford using money from his personal bank account. He wants to sell it, with the proceeds going to investors allegedly fleeced by Stanford.

Janvey disputes that the condo represents a legal gift from Stanford to his daughter, which would entitle her under Texas law to keep it. For it to be a gift, “the donor must relinquish all dominion and control over the property,” Janvey’s motion says.

Allen Stanford is the sole member of a limited liability company that owns the condo unit. Randi Stanford is its manager, according to Janvey’s motion.

Janvey notified Randi Stanford in late March that he intended to sell her condo. He offered to allow her to continue living there rent free so long as she maintained it in good order. He also offered to provide three hours notice before showing the unit to prospective buyers and 30-days notice for her to remove her possessions upon selling it.

Instead, she declined to cooperate and does not recognize Janvey’s authority over the condo, the receiver said.

In a response to Janvey’s contempt motion, Randi Stanford says she is accused of violating a court injunction which was never properly served, and that efforts to remove her violate her constitutional right to due process.

Randi Stanford also says she and her mother made a $70,000 down payment on the condo and have spent more than $113,000 for upkeep since she moved in three years ago. If the court determines that her father used tainted funds to buy it, Randi Stanford should still be “granted a share of the sale proceeds proportionate to their untainted contributions,” her lawyer argued.

In a separate ruling issued Tuesday, Godbey ordered the return of $21.2 million in gold coins and bullion to Stanford customers.

The ruling affects more than 200 customers, including 147 who had $20.2 million in coins and bullion individually marked and stored in Stanford vaults. Roughly another $1 million in gold was paid for and marked for delivery to about 70 customers when the SEC sued Stanford and froze the assets of his companies in February 2009.

The ruling does not make clear how and when those customers can reclaim their gold and coins from Stanford Coin and Bullion, one of many businesses in Stanford’s imploded financial empire. Kristie Blumenschein, an attorney in Janvey’s firm, said the process will begin shortly and that “much of the work of preparing for the distribution has already been completed.”

Janvey and court-appointed examiner John Little, who represents the interests of investors, support the return of the gold.

“The judge’s ruling is quite favorable for the vast majority of the coin/gold customers,” Little said in an e-mail.

Investors who ordered gold but hadn’t yet paid for those orders before Janvey was appointed to take over the Stanford companies get away unscathed, and the gold on hold for them will be sold for the benefit of other investors.

The judge declined to rule on whether customers who never received their gold, but ordered and paid for it before the government took over Stanford’s companies should get paid back or receive gold and coins.

If the judge agrees with Little and Janvey, those customers likely will have to line up and hope to be paid along with the rest of Stanford’s unpaid creditors, Little said.