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Recovering $2.7 Billion for 18,000 Victims in Stanford Ponzi Scheme

Two months after the arrest of Bernie Madoff, the SEC raided the offices of Stanford Investment Bank, which uncovered a multibillion-dollar Ponzi scheme that defrauded more than 18,000 investors. A Receiver was appointed and represented by Baker Botts, LLP, and FTI Consulting was engaged as the Receiver’s primary consultant to assist with recovery efforts. Dozens of professionals were engaged to identify and gain an immediate understanding of a vast network of assets, cash flow processes, personnel and all of their underlying electronic data systems.

Our Impact

A total of $2.7 billion to date has been recouped on behalf of more than 18,000 defrauded investors of Stanford International Bank.¹
Five banks that were sued for allegedly assisting Stanford in carrying out fraudulent activities settled pretrial for a total of $1.6 billion, a historic litigation settlement in Ponzi scheme recoveries.²
In 2024, the first $100 million settlement was distributed to victims, with more to come pending court approval.³
The 16-year-old SEC lawsuit was concluded in January 2025 when Chief District Judge David Godbey of Dallas issued a final judgment announcing hefty fines against the principal architects of the decades-long fraud.⁴

Our Role

As the primary consultant to the Receiver, FTI Consulting consolidated all liquid cash assets under the receivership and investigated and identified all electronic data systems (more than 100 in total) to forensically extract information relevant to the case.
FTI Consulting prepared various reports and analysis for the Receivership, law firms and various government entities including the DOJ, the SEC and the FBI. This analysis queried data across many systems and linked information from multiple sources including the company’s primary and ancillary internal accounting systems, treasury payment systems, and the underlying financial system containing the alleged fraudulent investment tool that became the central focus of the investigation.
We provided a technology solution to support the identification of all company‐related bank accounts and other sources of company funds, the transition of asset ownership to Receivership and the valuation of these assets. The engagement also involved technical and financial analysis related to the freeze and release of customer assets, asset recovery litigation and international litigation.
We identified all domestic brokerage accounts and secured them under a court order. We then analyzed each account’s activity history, identifying the net “winners” and “losers” to form the basis of the distribution plan for recoveries.

Footnotes:

1: “Receiver Ralph Janvey Settles with Bank Defendants for $1.6 Billion, Bringing Total Stanford Receivership Recoveries to more than $2.7 Billion,” Baker Botts news release (Feb. 27, 2023).

2: Ibid.

3: “Baker Botts Client, Stanford Receiver, Collects $1.3 Billion From Bank Litigation Settlements Since June 20, Bringing Total Receivership Recoveries to More Than $2.5 Billion,” Baker Botts news release (July 1, 2024).

4: Jonathan Stempel, “US SEC case over massive Allen Stanford fraud ends, judge orders fines,” Reuters (Jan. 30, 2025).