TEXARKANA, Texas (Reuters) - A decision by a U.S. appeals court could force Golf Channel to pay back a court-appointed receivership the $5.9 million it received from convicted swindler Allen Stanford’s Ponzi scheme, a receivership official said on Thursday.
The 5th U.S. Circuit Court of Appeals on Wednesday night reversed a lower court decision that allowed Golf Channel to avoid paying back the money it received from Stanford’s firm to become the title sponsor of the St. Jude’s Championship in Memphis.
The decision allows the receivership to seek the money from Golf Channel, said Kevin Sadler, a spokesman for the receivership run on behalf of about 18,000 swindled investors.
It could also affect claims the receivership is seeking in seven other sports marketing deals, including tennis, basketball and golf, worth about $36 million with Stanford International Bank, he said.
All of the other sports marketing cases were stayed at the defendants’ requests, pending the outcome of the appeal of the Golf Channel case, Sadler said.
A former Houston billionaire, Stanford was convicted in 2012 on 13 felony counts in a $7 billion Ponzi scheme that is regarded as one of the largest in U.S. history. He was sentenced to 110 years in federal prison in Florida but is appealing his conviction.
Golf Channel broadcast the tournament and offered Stanford an advertising package. The two-year deal was reached in October 2006 and worth $5.9 million.
Officials for Golf Channel, owned by Comcast Corp, were not immediately available for comment.
“Stanford lavished tens of millions of investors’ money on promoting his business through advertising and sports promotion activities, such as his strategic advertising campaign with the Golf Channel,” Sadler said.
Sports marketing helped Stanford lure more investors into the Ponzi scheme, the appeals court noted.
U.S. District Judge David Godbey, in November 2013, had ruled in Golf Channel’s favor, saying it looked “more like an innocent trade creditor than a salesman perpetrating and extending the Stanford Ponzi scheme.”
Reporting by Lisa Bose McDermott; Writing by Jon Herskovitz; Editing by Eric Beech