A Texas federal jury on Wednesday found billionaire Gary Magness acted in good faith when taking out $88.2 million in loans from a bank affiliated with R. Allen Stanford's $7 billion Ponzi scheme, blocking a clawback claim by the receiver for the Stanford fraud.

The seven-member jury deliberated for about three hours before finding that three investment vehicles owned by Magness had notice of the Stanford empire's potentially being fraudulent and should have investigated, but that it would have been futile for Magness to attempt to investigate the Stanford bank's complex fraud. The Magness companies—GMAG LLC, Magness Securities LLC and Mango Five Family Inc. in its capacity as trustee for the Gary D. Magness Irrevocable Trust—had taken out $88.2 million in loans from Stanford International Bank Ltd., collateralized by $79 million they had invested in certificates of deposit and $24 million in accrued interest.

The CDs the Magness entities bought were part of what turned out to be a sham empire run by Stanford, who is serving a 110-year prison sentence for the fraud. The loans have already been legally determined to be fraudulent transfers, so if the jury had rejected the good faith argument, court-appointed receiver Ralph Janvey would have been able to claw back the entirety of the loans, plus prejudgment interest that would have significantly exceeded $100 million. The Magness parties are represented by Rachel Mentz and Andrew Petrie of Ballard Spahr LLP.