Stanford Aide To Help In $8 Billion Fraud Probe
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 Chuck Meadows, a Dallas attorney who represented Stanford at a hearing earlier this month, has withdrawn from the case.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.”