A court officer will seek more than $210 million for victims of convicted Houston swindler Robert Allen Stanford’s multibillion-dollar Ponzi scheme by forcing other Stanford investors to return profits.

In some cases, those court-approved claims could have a devastating impact on retirees, a Baton Rouge lawyer said Friday.

Meanwhile, Stanford is serving a 110-year federal prison term for his conviction on fraud charges after his Ponzi scheme was shut down by federal authorities in February 2009. Stanford, 64, maintains he is innocent. He is appealing for reversal of his conviction.

Late Thursday, a three-judge panel of the 5th U.S. Circuit Court of Appeals affirmed the right of Dallas, Texas, lawyer Ralph S. Janvey to sue Stanford investors who made money from their investments for all of their profits. Any money remaining after collection of expenses would be distributed to victims who lost some or all of their investments.

For more than five years, Janvey has been the court-appointed receiver responsible for recovering as much as possible of the estimated $5 billion to $7 billion lost to Stanford’s Ponzi scheme by more than 20,000 investors in the U.S. and more than 100 other countries.

A Ponzi scheme is disguised as a legitimate investment program. Few, if any, legitimate investments are made by scheme operators, however. Instead, early investors are paid fake profits from money poured into the program by later investors. Still more investors empty their piggy banks into the black hole because of word-of-mouth reports of the program’s success.

Throughout such yearslong schemes, criminals are pocketing the majority of the cash and living large as more and more people invest in what appears to be a profitable enterprise.

In 2009, Janvey attempted to force all Stanford investors to surrender all cash they recovered before the man siphoning their savings was shut down and jailed.

The 5th Circuit, however, blocked that plan, noting the U.S. Securities and Exchange Commission had long-standing policies forbidding collection of Ponzi money from investors who lost any of their principal to conspirators like Stanford.

By the end of last year, Janvey had recovered $240.9 million, court records show. Janvey’s team of lawyers, accountants, investigators and clerical staff received $64.2 million of that total. Another $54.7 million was spent on receivership expenses. Some of Stanford’s more than 20,000 victims had received reimbursements totaling $30 million worldwide.

Now, armed with the 5th Circuit’s favorable decision, Janvey is headed after money paid to some of Stanford’s early investors.

Houston lawyer Kevin M. Sadler, representing Janvey, said, “The receiver is very pleased with this decision. This ruling is in accord with decisions of every other federal circuit court that has addressed the issue of whether investors who profited from a Ponzi scheme can retain their profits.”

Sadler said net-winner investors who have fought Janvey’s claims in court also have increased their debts to the receivership.

“Investors who were paid profits from the Stanford Ponzi scheme are liable to the receivership for those profits, plus attorneys’ fees and prejudgment interest,” Sadler said.

“The law simply does not allow anyone to profit from a Ponzi scheme, and that includes investors whose profits were paid with funds taken by fraud from other investors.”

How much could be recovered from net-winner investors?

“The receiver has filed claims against dozens of defendants to recover over $210 (million) in profits paid out by the Ponzi scheme,” Sadler said.

Any recovered funds, Sadler said, will be used to partially compensate more than 18,000 net-loser investors in the United States and other countries in South America, Europe and elsewhere around the globe.

Baton Rouge lawyer Phillip W. Preis represents more than a dozen net-winner investors targeted by Janvey for confiscation of their Stanford profits.

“We always knew that the equitable arguments in this case favored paying back the (profits) to the receiver so that people who lost money could receive a portion of their money,” Preis said.

“However, in reality, very little of the amount that is repaid by these retirees will actually go to people who lost money in Baton Rouge,” Preis added. He said that is because the number of foreign investors who lost money to Stanford is much larger than the number of victims in Louisiana and other states.

Preis also noted receivership fees and expenses will be deducted from money recovered from net-winner investors.

“If the money was actually going to people they (Preis’ clients) knew, it would have been repaid long ago,” the lawyer said.

“It is truly sad for a number of my clients because they have retired and have been living off the (profits) for many years prior to the failure of Stanford in 2009,” Preis said. “It will be difficult for them to pay it back and continue their normal retirement.”