A federal court ruled that the Libyan government can retain $54.8 million it received from Allen Stanford, a perpetrator of an immense Ponzi scheme. The ruling means that the Libyan funds will not be frozen, which could be a violation of the ban against attachments under the Foreign Sovereign Immunities Act. The judge ruled that the funds are property of a foreign state and therefore are not subject to attachment.

The case began with the federal complaint Attorney Ralph Janvey filed against the Libyan Investment Authority and the Libyan Foreign Investment Company claiming that Stanford International Bank had fraudulently transferred $54.8 million in illegal proceeds to the Libyan entities. Both the Northern District of Texas and the 5th Circuit federal court in New Orleans ruled that the funds can remain in place with the Libyan entities. The initial ruling was based on the fact that a preliminary injunction would freeze these funds before resolution of the case, acting as an attachment in violation of FSIA. The appeal decision ruled that Janvey did not show that the funds are not property of a foreign state.

The Libyan Investment Authority had invested a total of $139.6 million before the fraud was discovered and the Stanford fund went under, making it the largest overall loser of the scheme. As for Alan Stanford, he was sentenced to 110 years in federal prison for his role in the Ponzi scheme.