Victims of the massive Allen Stanford Ponzi scheme got a rare bit of good news Thursday. Some $18 million in Stanford funds that had been parked in Canada was returned to the U.S. for distribution to investors.
But the payment is tiny in comparison to the $5 billion in actual losses from the scam, and the court-appointed receiver who has spent the past five years searching for Stanford's billions tells CNBC it is unlikely investors will ever recover much because for the most part, "the money is gone."
"I think about the victims every day," Dallas attorney Ralph Janvey told CNBC in an exclusive interview, his first since being appointed five years ago.
"They believed what they were told. And I will say publicly I don't think the victims should be blamed for anything," Janvey said. "They made an investment based on what they were told. What they were told was wrong and it was fraud."
A federal judge placed Stanford's global financial empire in receivership—and under Janvey's control—after the Securities and Exchange Commission filed suit in 2009. The suit accused Stanford of running "a fraud of shocking magnitude" based on bogus certificates of deposit.
Stanford's brokers sold the CDs—issued by his offshore bank in Antigua and Barbuda—to investors around the world. But a federal jury found in 2012 that most of the funds went to support Stanford's lavish lifestyle. Stanford is serving a 110-year prison sentence, and appealing his conviction on 13 criminal counts.
Comparisons to Madoff Ponzi scheme
Since taking over as receiver, Janvey has been searching the world for assets as well as enduring frequent comparisons to the much more successful recovery effort in the Bernard Madoff Ponzi scheme.
"I don't minimize the Madoff fraud and I don't want to minimize the Madoff tragedy," Janvey said. "But Stanford was much more complicated."
That is reflected in the fact that while Janvey's counterpart in the Madoff case—trustee Irving Picard—has said investors could eventually recoup all of their principal. Janvey says the best case scenario for Stanford investors is "pennies on the dollar."
So far, Stanford's 28,000 victims—more than 10 times the number of victims in the Madoff case—have received next to nothing. Janvey received court approval last year to begin making his first distribution to clients. The $55 million being paid out amounts to less than one penny on the dollar.
To date, Janvey says, he has recovered only about $263 million. But nearly half of that—around $120 million—has been eaten up by expenses including $57 million just to wind down Stanford's global operations including 130 companies and 3,000 employees in 30 countries. Janvey says the money, including fees for him and a team of experts, "had to be spent" because of the complexity of the fraud.
"Stanford was spending $33 million a month on expenses," Janvey said. "We had to shut that down. It's also going to litigation; with the goal being what we spend is to bring money back into receivership to distribute to the victims."
(Read more: White-collar crime pipeline is full: DOJ official)