Ex-Stanford executive gets 5 years in $7B swindle
January 22, 2013
By JUAN A. LOZANO
The star prosecution witness in the trial of convicted Texas financier R. Allen Stanford was sentenced Tuesday to five
years in prison for helping to bilk investors out of more than $7 billion in one of the biggest Ponzi schemes in U.S.
history.
James M. Davis had faced up to 30 years in prison after pleading guilty in 2009 to three fraud and conspiracy charges
as part of an agreement with prosecutors.
"I am ashamed and I'm embarrassed," Davis said at the sentencing hearing at Houston federal court. "I've perverted what
was right and I hurt thousands of investors. I betrayed their trust and also associates and neighbors and friends and
my family."
Prosecutors say Stanford persuaded investors to buy certificates of deposit from his Caribbean bank, then used that
money to bankroll a string of failed businesses and his own lavish lifestyle, including a fleet of private jets and
yachts.
At Stanford's trial last year, Davis - the former chief financial officer of Stanford's companies - portrayed his
ex-boss as the leader of the fraud who burned through billions of CD deposits. He testified that he and Stanford faked
the bank's profits and fabricated documents to hide the fraud.
Stanford, a one-time billionaire, was convicted in March on 13 of 14 fraud-related counts. He was sentenced to 110
years in prison and is serving his sentence in a Central Florida prison.
Many of the dramatic details at Stanford's fraud trial - including testimony about bribes and blood oaths - came from
Davis.
Stanford's defense attorneys accused Davis of being behind the fraud and tried to discredit him by calling him a liar
and tax cheat. Davis, who was Stanford's roommate at Baylor University for a semester in 1973, said he realized he was
party to fraud when he was asked to lie to a potential investor to say the bank had insurance.
Davis said he was "one of those liars" who faked the bank's numbers but that Stanford was "the chief faker."
Another top executive in Stanford's now-defunct empire - former chief investment officer Laura Pendergest-Holt - was
sentenced to three years in prison in September after pleading guilty to one count of obstruction of a U.S. Securities
and Exchange Commission proceeding.
Two other ex-executives - Gilbert Lopez, the ex-chief accounting officer, and Mark Kuhrt, the ex-global controller -
were convicted in November of conspiracy to commit wire fraud and nine counts of wire fraud. They are set to be
sentenced Feb. 14.
A former Antiguan financial regulator was also indicted and awaits extradition to the U.S.
READER DISCUSSION
SIVG reserves the right to delete comments that are off-topic or offensive. Excessively long comments may be moderated as well. SIVG cannot facilitate requests to remove comments or explain individual moderation decisions. The comments posted here, express only the views of their authors and not the administrators/moderators from SIVG; for that reason SIVG won't be held responsible for those contents
Showing 0 comments...