By Andrew M Harris and Laurel Brubaker Calkins

HOUSTON, USA (Bloomberg) -- Stanford International Bank Ltd’s court-appointed receiver said he’s seeking to recoup $925 million tied to certificates of deposit issued by Allen Stanford’s Antigua-based bank.

Allen Stanford. Bloomberg photo

The receiver, Ralph Janvey, on Tuesday expanded a complaint first filed in April in federal court in Dallas to recover money from Stanford customers as well as brokers who allegedly profited from a $7 billion fraud.

Janvey, who is charged with recovering money for Stanford’s clients, said in a statement that he wants to “achieve equity for all investors by maximizing the assets of the estate.”

A Dallas lawyer, Janvey was appointed by the court in February after the US Securities and Exchange Commission sued Stanford, two associates and three of his businesses, alleging they were part of a “massive” fraud scheme involving sales of the certificates of deposit.

Stanford was indicted on 21-counts in June by a grand jury in Houston. The financier has denied the civil and criminal allegations.

Ten Stanford Group Co. financial advisers asked US District Judge David Godbey in Dallas to release assets of theirs that were ordered frozen after the SEC filed its lawsuit.

The stockbrokers, in a court filing yesterday, said they were “innocent victims.” They said some of them invested their own money in the bank’s certificates.

“Their only sin,” the brokers’ attorneys told Godbey, “is that they were duped by Stanford’s alleged misrepresentations and misdeeds, just like other Stanford clients that the receiver is charged with protecting.”

Janvey, according to the financial advisers, opposed earlier requests for release of their accounts even as he reached agreements with other investors whose holdings were frozen.

Jordan Gibennus, an outside spokeswoman for Janvey, declined to immediately comment on the stockbrokers’ filing. She is affiliated with Pierpont Communications Inc. in Houston.

The SEC and John Little, a lawyer appointed by the court to represent Stanford investors’ interests, previously urged Godbey to prevent Janvey from suing about 300 investors to recover more than $600 million.

They claimed the lawsuits would cost more than they would recover and would punish people who are already victims.

“The commission simply does not make a practice of suing innocent victims of Ponzi schemes for the return of principal, and applies a great deal of discretion and consideration before asserting claims against victims for the return of interest payments received,” David Reece, the SEC’s lead lawyer in the case, said in a July 20 filing.

The SEC “is not aware of any compelling reason” for Janvey to pursue Stanford investors, Reece said in that filing. Kevin Callahan, a spokesman for the SEC, declined to immediately comment on Janvey’s filing yesterday.

Little said in an e-mail that he couldn’t immediately comment on the amended complaint filed yesterday by the receiver.

Janvey said in his statement that the defendants in the expanded complaint are “a very small percentage of the more than 20,000 investor who have thus far received little or nothing from their investment.”

“Upon recovery, these funds will be shared by all CD investors, including those from whom the funds are recovered,” Janvey said.

The proceeds sought, Janvey lawyer Kevin Sadler said in the revised complaint, “are little more than stolen money and do not belong to persons who received such funds.” Janvey can’t fulfill his duty as Stanford’s receiver “if some who received stolen money, through luck, chance or complicity, are allowed to keep stolen money.”

Included in a 29-page listing of former Stanford brokers and clients Janvey is pursuing as “relief defendants” in the clawback case is the Libyan Foreign Investment Co., which is listed as realizing $54.8 million in Antiguan CD proceeds from 2008 to 2009.

In documents introduced in Stanford’s criminal case, the financier said he met with Libyan officials in January to discuss boosting the country’s $500 million investment in Stanford’s companies.

“Janvey is pushing the idea of clawbacks into uncharted waters by suing investors for any money they received, even if they are ‘net losers’ and have not recovered the principal from their investments,” Michael Stanley, a Houston lawyer, said yesterday in an e-mailed statement.

Stanley represents dozens of former Stanford customers and financial advisers, some of whom are countersuing Janvey.

“This goes far beyond what has been happening in New York, where the receiver in the Madoff case has limited his clawbacks to situations where investors received more than they put in,” he said.

In the criminal case against Stanford, prosecutors told U.S. District Judge David Hittner in Houston that Stanford’s request for access to assets frozen in the SEC case so he can pay his legal-defense costs is untenable and should be denied.

The prosecutors, in a filing on Tuesday, said the relief Stanford seeks would cause them to violate Godbey’s order.

Godbey “has already ruled that the remaining assets of the estate are tainted funds that cannot be taken from the investors to be used for Stanford’s defense,” the prosecutors said.

Stanford’s lead defense lawyer, Dick DeGuerin, said some of the assets should be released.

“If you look at the indictment, the allegations don’t cover even half of the time Stanford had his businesses going,” DeGuerin said in a phone interview. “So all of the early assets should be available” to satisfy Godbey’s requirement that Stanford pay his lawyers with untainted funds.

In a July 6 filing, the financier told Hittner that the asset freeze ordered by the Dallas court is keeping him from mounting a defense in both cases.

“The government has repeatedly sought to deprive Stanford of his ability to obtain any funds to defend himself,” his lawyers said in that filing.

Stanford, who ranked 205th on Forbes magazine’s 2008 list of the world’s richest people. His lawyers have previously said the cost of defending him could exceed $20 million.