Janvey v. Romero, 2016 U.S. App. LEXIS 4835

Background

R. Allen Stanford ran a multi-billion dollar Ponzi scheme through numerous Stanford entities that sold fraudulent CDs; the SEC sued and Ralph Janvey was appointed Receiver in February 2009.
Peter Romero served ~8 years (retired State Dept. employee) on Stanford’s International Advisory Board (IAB) and received about $700,000 in advisory fees plus expenses and CD payments.
The Receiver began investigating IAB payments in October 2010 and sued Romero for fraudulent transfers and unjust enrichment on February 15, 2011.
After a four-day jury trial (Feb. 2015), the jury returned a verdict for the Receiver on both theories; the district court awarded $788,655.01 on the fraudulent-transfer claim.
Romero moved for judgment as a matter of law, arguing part of the TUFTA claim was time-barred by the statute of repose; the district court denied the motion and Romero appealed.
The central factual dispute concerned whether the Receiver reasonably could have discovered the transfers to Romero more than one year before filing (i.e., before Feb. 15, 2010), given the receivership’s complexity and competing priorities.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether TUFTA’s one-year repose (discovery) bars recovery for transfers before Feb. 15, 2007	Receiver: he did not and could not reasonably have discovered the transfers to Romero and their fraudulent nature until after Feb. 15, 2010, given the scope and priorities of the receivership	Romero: Receiver could have discovered transfers earlier (within ~4.5 months of appointment) and delayed investigation should not toll the repose	Court affirmed jury verdict: sufficient evidence supported finding Receiver could not reasonably have discovered transfers until after Feb. 15, 2010; claim timely under TUFTA
Whether the Receiver’s delay in investigating the IAB was unreasonable for statute-of-repose purposes	Receiver: early receivership required prioritization (asset control, foreign litigation, account freezes, massive document forensics); diligence shown	Romero: choosing not to investigate earlier shows lack of diligence; repose should run	Court: evidence of complex priorities and forensic workload allowed reasonable-jury finding that Receiver exercised reasonable diligence
Whether knowledge of Stanford/entities imputes to Receiver for accrual	Receiver: knowledge of principals does not impute to receiver because corporations were controlled by Stanford’s fraud	Romero: contends knowledge could be imputed to start repose earlier	Court: follows prior precedent—knowledge of principal not imputed; accrual not charged to Receiver
Whether appeal should be abated pending Texas Supreme Court’s TUFTA market-value certification	Romero: asks abatement because a future Texas ruling on reasonably-equivalent-value might affect his defense	Receiver: opposes; Romero did not object to jury instruction or brief the issue on appeal	Court: deny abatement—Romero failed to preserve or brief the market-value argument

Key Cases Cited

Janvey v. Democratic Senatorial Campaign Comm., Inc., 712 F.3d 185 (5th Cir. 2013) (TUFTA accrual requires discovery of transfer and its fraudulent nature)
Janvey v. Brown, 767 F.3d 430 (5th Cir. 2014) (knowledge of Ponzi principal not imputed to corporations; discovery/accrual analysis)
Abraham v. Alpha Chi Omega, 708 F.3d 614 (5th Cir. 2013) (standard of review for judgment as a matter of law)
Cox Operating, L.L.C. v. St. Paul Surplus Lines Ins. Co., 795 F.3d 496 (5th Cir. 2015) (describing the high bar for judgment as a matter of law)
Carroll v. Ellington, 800 F.3d 154 (5th Cir. 2015) (credit non-moving party’s evidence on JMOL review)