They are not going to get it.

On Monday, a group of plaintiffs identifying themselves as victims of the Sir Allen Stanford’s alleged $7bn Ponzi scheme filed a class-action lawsuit against the Government of Antigua and Barbuda that claimed (among other things):

- that the government of the island nation of Antigua and Barbuda, the offshore home of Stanford International Bank, is liable for their multi-billion dollar losses.

  – that Antigua not only provided a safe haven for Stanford to operate, but also that it became Stanford’s full financial partner in the fraud.

- that Antigua, and prominent Antiguan officials, received tens-of-millions of dollars in loans, grants, and outright bribes from Stanford, knowingly facilitated the fraud, and deceived the plaintiffs, the class they seek to represent, and foreign regulators.

The complaint is asserted under the United States Racketeer Influenced and Corrupt Organizations Act (RICO),  as well as claims for common law fraud. The plaintiffs are seeking at least $8bn in damages, and treble damages under RICO – or $24bn.

Not going to happen. Antigua is a tiny, seriously indebted nation that is dealing with a precipitous decline in tourism and the Stanford-related collapse of its one hope for diversifying its economy – offshore financial services. The global crackdown on offshore tax havens isn’t helping much, either.  Its attempts to establish itself as an offshore gaming centre have drawn the ire of the US government.

The country’s previous, primary source of income – a banana industry – was wounded by the loss of preferential tariff agreements with the EU, and was dealt further blows by a series of hurricanes this decade that levelled the plantations.

And finally, $24bn is also 24 times Antigua’s 2008 GDP.

Whatever the merits and outcome of the lawsuit, the sum demanded is nigh on uncollectible.

This entry was posted by Stacy-Marie Ishmael on Monday, July 13th, 2009 at 22:45 and is filed under Capital markets, People. Tagged with Antigua, Sir Allen Stanford, Stanford International Bank. Edit this entry.