Arizona v. Gant, decided by the United States Supreme Court on April 21, 2009.
Held: Police may search the passenger compartment of a vehicle incident to a recent occupant’s arrest only if it is reasonable to believe that the arrestee might access the vehicle at the time of the search or that the vehicle contains evidence of the offense of arrest.
This is an important case, imo.
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CLIFFORD KRAUSS
Published: April 20, 2009
HOUSTON — R. Allen Stanford, the Texas financier accused of defrauding tens of thousands of bank depositors, said on Monday that he was not a thief. He denied that his operation was a Ponzi scheme and suggested that if any depositor money had been lost, it was largely a result of “Gestapo tactics” used by the government.
Robert Allen Stanford“I don’t think there is any money missing,” Mr. Stanford said. “There never was a Ponzi scheme, and there never was an attempt to defraud anybody.”
The government has said as much as $6 billion is missing.
In an interview at his lawyer’s office in Houston, a high-strung, emotional Mr. Stanford offered various theories about the problems that have engulfed his Stanford Financial Group and Stanford International Bank.
He allowed that some of the assets held by his organization on behalf of clients might have declined in value. As explanation, he cited the economic crisis and actions the government had taken against him in recent months. But in another part of the interview, Mr. Stanford suggested that if any fraud had been committed, James M. Davis, his former chief financial officer, was to blame.
“The investment and risk committee reported to Jim Davis, not to me,” he said. “The Stanford International Bank quarterly report was produced in Tupelo, Miss., under Davis’s direction and signed off by him. I trusted his integrity.”
Mr. Davis is cooperating with the government, and it seems increasingly likely he and Mr. Stanford will square off in court.
Through his lawyer, Mr. Davis has characterized himself publicly as little more than a dupe. “Stanford told my client what the quarterly numbers for the firm had to be,” said Mr. Davis’s lawyer, David Finn. “He used Davis. And if Davis didn’t go along with it, he said he could easily find someone else who would.”
Mr. Stanford replied, “That is an absolute lie.”
In the interview, Mr. Stanford swung between defiance and self-pity. He tapped his feet much of the time, and when he stopped tapping, his legs shook. He portrayed himself as a hard-working, honest man who loves his children and is dedicated to his former employees and investors.
He denied an accusation by the Securities and Exchange Commission that he had taken a $1.6 billion loan from his company without disclosing it, adding, “the money was not going to me personally; it was going into investments.”
Mr. Stanford has not been charged with a crime. In February, the S.E.C. filed a civil suit accusing him and two other executives of engaging in an international fraud, effectively shutting down the operation. Mr. Stanford has largely remained silent since then. But in one of a series of media interviews in his lawyer’s office on Monday, Mr. Stanford took the gloves off.
Dressed in a somber blue double-breasted suit and conservative tie, he accused the S.E.C. of squandering the assets of his financial companies. He said the court-appointed receiver was a “jerk” whose aides, assigned to look for missing funds, “can’t find their rear end from a hole in a ground.”
He said the credit cards in his wallet were worthless, he had been locked out of his apartment on St. Croix, his bank accounts were frozen and he did not even have money to pay his lawyer.
“It’s debilitating, devastating, horrific,” he said. “But I am going to fight for my name, and I am going to win.” Still wearing the Stanford Eagle logo pin on his lapel, he pledged to work hard to get his investors’ money back.
Mr. Stanford denied the allegation in the civil case that he had operated a “massive Ponzi scheme.”
In a Ponzi scheme, early investors are paid abnormally high returns with money from later investors. Ever more people are lured into the fraud until it eventually collapses.
Mr. Stanford said that he had put his depositors’ money into “real assets backed up by real investments.”
He said the S.E.C. “took an organization that had a net value of about $3.5 to $5 billion and basically crippled it; they rendered it almost worthless.”
His suspected fraud involved billions of dollars of certificates of deposit issued by Stanford International Bank, located on the island of Antigua. The instruments, paying unusually high returns, were marketed from Stanford Financial Group offices around the United States and Latin America. In recent weeks, receivers in the United States and Antigua have frozen assets, closed down Stanford operations and fired hundreds of employees.
Once the S.E.C. stepped in, Mr. Stanford said there was a “ripple effect” around the world with governments freezing assets of his various investment offices. Mr. Stanford’s lawyer, Dick DeGuerin, said any shortages were because “investments have lost value because of the actions of the S.E.C. and the fall of the stock market.”
In the interview, Mr. Stanford appeared to lay out a defense strategy that includes blaming Mr. Davis — his chief financial officer and former roommate at Baylor University — for whatever fraud might have occurred.
Mr. Stanford and Mr. Davis always seemed to be an odd couple, according to former employees of Stanford Financial Group. Mr. Stanford was known for his quick temper and taste for the high life, while Mr. Davis was seen as a soft-spoken religious man who started his own church in Mississippi and led prayers before business meetings.
Now the relationship appears to be turning ugly.
Mr. Finn said Mr. Davis is telling federal investigators “the truth, the whole truth and nothing but the truth, and the truth implicates Mr. Stanford up to his eyeballs in fraud.”
So far only Laura Pendergest-Holt, Stanford Financial’s chief investment officer, has been charged criminally, with obstruction of justice.
An S.E.C. spokesman, John Nester, said he would not comment on Mr. Stanford’s assertions. “We stand by the allegations of our complaint,” Mr. Nestor said.
Mr. Stanford and Mr. Davis are accused of fabricating the performance of Stanford International Bank’s investment portfolio.
“If bad things were happening, he never brought them to my attention,” Mr. Stanford said of Mr. Davis. “He did his job, and I stayed out of his hair.”
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By Laurel Brubaker Calkins
April 9 (Bloomberg) — Stanford Group Co. Chief Financial Officer James M. Davis, accused by federal regulators of helping his boss, R. Allen Stanford, run a multibillion dollar Ponzi scheme, will enter plea negotiations with prosecutors.
Davis was sued by the U.S. Securities and Exchange Commission along with Stanford. Davis will negotiate to resolve potential criminal and civil liability related to a suspected $8 billion Ponzi scheme, his attorney said.
“We anticipate beginning those conversations as early as next week,” David Finn, Davis’s lawyer, said today in a phone interview. “Things are accelerating rapidly. We are starting to shift gears and starting to look forward for a resolution.”
The SEC sued Stanford, Davis, Chief Investment Officer Laura Pendergest-Holt and three affiliated companies, accusing them of running a “massive ongoing fraud’’ selling certificates of deposit through Antigua-based Stanford International Bank.
Davis, 60, began cooperating with federal investigators March 25, Finn said. Until now, discussions focused exclusively on helping to locate Stanford assets around the world, including roughly $105 million in Stanford-linked London bank accounts frozen last week by a U.K. High Court order.
“We’ve not had plea negotiations to this point, but we’re making plans to start going down that road,’’ Finn said today. “Thus far virtually all of the time that we’ve spent with the SEC and DOJ investigators has focused on locating assets and helping them understand what did and did not happen.”
‘Most Pressing’
Neither Stanford nor Davis has been charged with a crime. Finn said insuring that talks resolve any potential criminal charges Davis faces would “obviously be the most pressing concern.”
“We’d love to wrap it all up at once,” Finn said. “Our priority will be on the criminal front. The tail won’t be wagging the dog, and the SEC case would be the tail in this situation”
Stanford, 59, said April 6in an interview with ABC News that he might be criminally indicted within the next two weeks. Dick DeGuerin, the Houston lawyer Stanford hopes to hire if he can access court-frozen funds, has denied Stanford did anything wrong.
Pendergest-Holt was charged with criminal obstruction of the investigation and released on $300,000 bail. Her lawyer said she is innocent. Pendergest-Holt agreed to extend the government’s deadline to formally indict her until April 28.
Ian McCaleb, spokesman for the Justice Department, declined to comment on the investigation.
The SEC case is SEC v. Stanford International Bank, 09- 00298, U.S. District Court, Northern District of Texas (Dallas).
To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.
Last Updated: April 9, 2009 14:37 EDT
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http://abcnews.go.com/Video/playerIndex?id=7273921
Native Texan R. Allen Stanford told ABC News that fraud allegations against him and his Stanford Financial Group companies are “baloney,” according to a report aired Monday.
In what the network said was Stanford’s first media interview since the Securities and Exchange Commission filed the civil fraud complaint, Stanford also denied the SEC’s allegation that he and codefendants operated a Ponzi scheme — in which early investors are paid with money from later ones.
“I would die and go to hell if it’s a Ponzi scheme,” Stanford said in what appeared to be an unplanned run-in with the television crew. “It’s not a Ponzi scheme. If it was a Ponzi scheme, why are they finding billions and billions of dollars all over the place?”
In February the SEC filed a civil suit against Houston-based Stanford Financial Group, Antigua-based Stanford International Bank and three top executives including Stanford, alleging an $8 billion fraud. Accounts and assets tied to the brokerage, bank and individuals were frozen by court order throughout the U.S. and overseas.
The separate court-appointed receivers for the Stanford companies in the U.S. and Antigua have said there appears to be less than $1 billion in assets tied to the bank based on the property and bank accounts they’ve recovered so far.
Stanford, who so far only faces a civil complaint, also told the network that he expects to be indicted within the next two weeks, but intends to challenge the allegations. “I’m going to fight this with everything in me,” he said.
Dick DeGuerin, a Houston criminal defense lawyer Stanford hopes to hire, said he has not seen the ABC interview, which he said occurred at a Houston hotel last week.
“It was a chance encounter, and he lost his temper. He felt bad about that and trying to make up for it, he went on and on,” DeGuerin said.
He said he’s not as sure as Stanford that an indictment is imminent.
“It could go quickly, but if they really examine what happened, there will be no indictment,” DeGuerin said.
DeGuerin said Stanford was emotional in the ABC interview, in which he sometimes was tearful, because of his anger over what’s happened to the business he built up for 20 years.
“The SEC caused a run on his banks, they caused banks to be nationalized in other countries,” DeGuerin said. “The SEC has done more damage to the Stanford companies than the stock market crash did.”
In other action in the case Monday, a London court granted the SEC an extended freeze on U.K.-based assets tied to Stanford Financial Group, including more than $100 million in equities and cash.
The High Court in London signed an order freezing the assets through April 27, which according to court documents include about $105 million in assets held in Credit Suisse accounts and another $5 million in accounts at HSBC.
Court-appointed receivers have been searching all over the world for assets tied to the Stanford bank in Antigua. A lawyer representing Stanford Chief Financial Officer James Davis, who also was named in the SEC suit, says his client has been helping the SEC and the Department of Justice in their dealings with European banks.
“We are hopeful that additional assets, particularly with a Swiss flavor, will be located to help compensate the investors,” attorney David Finn said.
According to court papers, Credit Suisse has Stanford accounts with about $97.5 million in hedge fund investments, $1 million in cash, $5.4 million in Swiss franc shares and other assets.
The HSBC accounts contained another $5 million in euros, English pounds, Swiss francs and U.S. dollars.
Credit Suisse had instructions to liquidate the entire London portfolio in early February, just before the SEC filed its case, according to court papers, and on Feb. 12 received an order to wire $17 million to Stanford International Bank accounts in Houston.
According to the court documents, the bank didn’t carry out the orders.
tom.fowler@chron.commary.flood@chron.com
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WASHINGTON, DC — The Coalition to Preserve the Attorney-Client Privilege issued the following statement on the Senate Judiciary Committee confirmation proceedings scheduled for January 15, 2009 on the nomination of Eric H. Holder Jr., to be Attorney General of the United States:
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COALITION TO PRESERVE THE ATTORNEY-CLIENT PRIVILEGE
American Chemistry Council
American Civil Liberties Union
Association of Corporate Counsel
Business Civil Liberties, Inc.
Business Roundtable
The Financial Services Roundtable
Frontiers of Freedom
Lawyers for Civil Justice
National Association of Criminal Defense Lawyers
National Association of Manufacturers
Retail Industry Leaders Association
U.S. Chamber of Commerce
COMPREHENSIVE REFORM STILL CRITICALLY NEEDED TO PROTECT
ATTORNEY-CLIENT PRIVILEGE AND EMPLOYEE LEGAL RIGHTS
In response to growing concerns raised by Congressional leaders, former Justice Department officials, and many in the legal and business communities, the Department of Justice replaced the 2006 “McNulty Memorandum” in August 2008 with new corporate charging guidelines that direct U.S. Attorneys and Assistant U.S. Attorneys not to coerce companies and other organizations to waive their attorney-client
privilege or work product protections, or to pressure their individual employees to waive their own legal and constitutional rights during investigations in return for cooperation credit. The Securities and Exchange Commission subsequently issued a new Enforcement Manual in October 2008 that provides additional guidance on its privilege waiver policy outlined in the 2001 “Seaboard Report.” Though helpful,
the SEC’s new language still contains numerous loopholes and does not provide adequate protection for the privilege and employee legal rights.
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Stanford’s Davis Said to Be Aiding Search for Assets in Europe
By Laurel Brubaker Calkins
April 4 (Bloomberg) — Stanford Group Co.’s finance chief, James M. Davis, is helping investigators track European assets that might help repay victims of the suspected $8 billion Ponzi scheme involving Texas billionaire R. Allen Stanford.
“Jim Davis’s focus in the last week has been on European institutions and especially institutions in Switzerland,” Davis’s lawyer, David Finn, said yesterday in a phone interview. “Jim Davis is helping them follow the money trail, because it’s going to lead straight to Allen Stanford’s doorstep.”
Finn said he didn’t know how much money Davis has helped investigators locate so far.
The U.S. Securities and Exchange Commission sued Stanford, Davis and Chief Investment Officer Laura Pendergest-Holt, along with three Stanford companies, on Feb. 17 for allegedly running a “massive, ongoing fraud” through the sale of high-yield certificates of deposit by Antiguan-based Stanford International Bank.
The SEC suit claims Stanford skimmed $1.6 billion in personal loans from his companies. Finn said Davis earned a total of $4 million to $5 million after-taxes during 10 years as Stanford’s second-highest ranking officer.
“So when the government finds out where the money went, and whose pocket or pockets it went into, the difference between Davis and Stanford will become crystal clear,” Finn said.
Stanford Denial
Dick DeGuerin, a lawyer who has agreed to defend Stanford if the financier can access funds frozen by the court, has denied the company was a Ponzi scheme.
U.S. District Judge David Godbey in Dallas placed Stanford’s corporate and personal assets under the control of receiver Ralph Janvey, who is trying to locate and liquidate assets for the benefit of depositors. In a court filing, Stanford accused Janvey of “wasting” his assets.
“The receiver is wasting the assets of the Stanford entities and of R. Allen Stanford, rather than preserving them,” Stanford said in the filing he mailed to Godbey. The document isn’t publicly available. DeGuerin’s office provided a copy of the filing to Bloomberg News yesterday.
Stanford, 59, and Davis, 60, haven’t been criminally charged. Pendergest-Holt, 35, who was charged with criminally obstructing the investigation, has said through her lawyer that she is innocent.
Finn said a plea deal hasn’t been discussed during the “many, many hours” that Davis has been cooperating with investigators, beginning March 25.
“We’ve not spent one single second” negotiating a plea, Finn said. “When all the assets have been found that can be found, then we may turn to negotiations on the SEC and criminal fronts,” he said.
Kevin Callahan, an SEC spokesman, declined to comment in an e-mail.
The case is Securities and Exchange Commission v. Stanford International Bank Ltd., 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas).
To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.
Last Updated: April 4, 2009 00:01 EDT
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Legal Affairs-NPR
Stanford Aide To Help In $8 Billion Fraud Probe
“We are fully cooperating with federal investigators. It’s a massive investigation that will take some time to resolve. We are ready, willing and able to answer questions truthfully and provide whatever assistance we can.” Attorney David Finn, who represents Stanford finance chief James M. Davis.
NPR.org, March 24, 2009 · The chief financial officer of the troubled companies owned by Texas billionaire R. Allen Stanford has promised full cooperation with federal investigators looking into an alleged $8 billion investment fraud, the man’s attorney said Tuesday.
Finance chief James M. Davis’ decision to work with investigators comes nearly two weeks after a court filing indicated he would assert his Fifth Amendment right against self-incrimination. Court documents said Davis would not “testify, provide an accounting or produce any documents” related to the Securities and Exchange Commission’s civil case, which accuses him and Stanford of running a Ponzi scheme.
Dallas attorney David Finn, who recently began representing Davis, said he could not comment on his client’s previous stance.
“We are fully cooperating with federal investigators,” Finn said. “It’s a massive investigation that will take some time to resolve. We are ready, willing and able to answer questions truthfully and provide whatever assistance we can.”
Finn said there will be “a time and a place” to address allegations of Davis’ involvement in what the government has alleged is an investment fraud centered on certificates of deposits sold at Antigua-based Stanford International Bank.
Davis was not promised leniency, Finn said. He is cooperating with both the SEC and the Department of Justice’s fraud unit, which has begun a criminal investigation.
“Nothing has been promised and nothing has been asked for,” Finn said. “It’s premature to be discussing or contemplating any sort of negotiations along those lines.”
An SEC spokesman and a Justice Department spokesman declined to comment. In a criminal complaint filed against Laura Pendergest-Holt, the chief investment officer of the Stanford Financial Group, the FBI revealed it has been investigating Stanford’s companies since June.
Only Pendergest-Holt has been charged with a crime — obstructing the SEC’s investigation. Her attorney did not immediately respond to a request for comment.
Davis’ cooperation could help the government advance its case against Stanford, who has no attorney listed in connection with the investigation. Chuck Meadows, a Dallas attorney who represented Stanford at a hearing earlier this month, has withdrawn from the case.
About 85 percent of the 32,000 Stanford accounts that were frozen after a federal judge placed Stanford’s assets under control of a receiver have been released to investors. The remaining accounts are mostly CDs or bank accounts at Stanford International Bank in Antigua.
Although the names of some investors have been publicly reported, the receiver has agreed to keep their identities confidential. That’s a victory for those wishing for privacy, said Steve Malouf, a Dallas attorney who represents hundreds of South American investors, mostly from Ecuador and Venezuela.
“We all want the same thing,” Malouf said. “We want the receiver to collect as much as he can and return it to the account holders with as little deductions as possible.”
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NPR.org, March 24, 2009 · The chief financial officer of the troubled companies owned by Texas billionaire R. Allen Stanford has promised full cooperation with federal investigators looking into an alleged $8 billion investment fraud, the man’s attorney said Tuesday.
Finance chief James M. Davis’ decision to work with investigators comes nearly two weeks after a court filing indicated he would assert his Fifth Amendment right against self-incrimination. Court documents said Davis would not “testify, provide an accounting or produce any documents” related to the Securities and Exchange Commission’s civil case, which accuses him and Stanford of running a Ponzi scheme.
Dallas attorney David Finn, who recently began representing Davis, said he could not comment on his client’s previous stance.
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