University of Miami Sued for $6.4 Million in Ponzi Scheme Funds
The University of Miami sure has a problem with getting caught up with Ponzi schemers. First, high profile athletic booster Nevin Shapiro was busted for a scheme, and now the university is being sued for its involvement in the alleged Ponzi scheme run by Allen Stanford. The suit claims that UM kept nearly $6.4 million it received from Stanford's company that it doesn't deserve.
Stanford owns the Stanford Financial Group, which had its headquarters in Miami and was accused in 2009 by the U.S. Securities and Exchange Commission for massive frauds related to a scheme that ripped off investors of nearly $8 billion. Stanford currently sits in jail. His trial is scheduled to begin sometime this month.
According to Bloomberg News, UM is being targeted by Ralph Janvy, the man appointed by a federal judge in 2009 to round up assets to pay off Stanford's creditors. He claims that the university received $250,000 in 2006, $5.1 million in 2007 and $1.01 million in 2008 from Stanford Financial.
UM apparently invested in Stanford's scheme but was one of the few clients that actually got paid. Most of the money went to fund Stanford's lavish lifestyle.
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"The university either performed no services for the CD proceeds it received; performed services that did not constitute reasonably equivalent value in exchange for the CD proceeds it received or it performed only services that were in furtherance of the Ponzi scheme," reads the suit.
When reached by Bloomberg news, a spokeswoman for the university refused to comment.
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