Stanfordâs Davis Said to Be Aiding Search for Assets in Europe
By Laurel Brubaker Calkins
April 4 (Bloomberg) — Stanford Group Co.âs 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.
âJim Davisâs focus in the last week has been on European institutions and especially institutions in Switzerland,â? Davisâs lawyer, David Finn, said yesterday in a phone interview. âJim Davis is helping them follow the money trail, because itâs going to lead straight to Allen Stanfordâs doorstep.â?
Finn said he didnât 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 âmassive, ongoing fraudâ? 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 Stanfordâs second-highest ranking officer.
âSo 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,â? Finn said.
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 Stanfordâs 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 âwastingâ? his assets.
âThe receiver is wasting the assets of the Stanford entities and of R. Allen Stanford, rather than preserving them,â? Stanford said in the filing he mailed to Godbey. The document isnât publicly available. DeGuerinâs office provided a copy of the filing to Bloomberg News yesterday.
Stanford, 59, and Davis, 60, havenât 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 hasnât been discussed during the âmany, many hoursâ? that Davis has been cooperating with investigators, beginning March 25.
âWeâve not spent one single secondâ? negotiating a plea, Finn said. âWhen all the assets have been found that can be found, then we may turn to negotiations on the SEC and criminal fronts,â? 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).
Last Updated: April 4, 2009 00:01 EDT