By Patsy R. Brumfield/NEMS Daily Journal
HOUSTON, Texas – The much-anticipated testimony from former Stanford executive James Davis will have to wait, at least another half day in the federal trial of his former boss, R. Allen Stanford.
Henry Amadio, an accountant, faces more grilling today from defense attorney Robert Scardino about what he really knew about the fallen financier’s dealings and who made what decisions.
Amadio was Wednesday’s only witness in the fraud trial in which the government claims Stanford, 61, conducted a $7.2 billion fraud on investors of certificates of deposit through his Antigua-based Stanford International Bank.
The defense claims Stanford was a visionary entrepreneur with plans that would have worked out in the Caribbean for a “richest of the rich” resort, if the U.S. economy hadn’t tanked and if federal investigators hadn’t scared investors into making a run on the bank.
Early in the day, Amadio was a strong witness, demonstrating he knew a lot about the way money flowed through umbrella Stanford Financial Group, with cash coming from SIBL loans to SGF then to the numerous Stanford-affiliated companies. Enterprises ranged from a bank, restaurant, marina, Cricket field, private plane hangars and two Caribbean airlines.
By the end of 2007, the last year for which an annual financial report was developed, he said he didn’t see enough money coming in to the bank to pay off the $1.6 billion in loans Stanford took out to operate his companies.
“The only conclusion was that money was coming from client deposits to cover that amount, $1.6 billion that had gone to Mr. Stanford’s other companies,” Amadio said.
He concluded, after analyzing the finances, that the loans would never be repaid.
Throughout his sometimes passionate, detailed testimony, he referred to Stanford as “The Shareholder” and noted with alarm how large “The Shareholder’s” fund was becoming across the years.
By late afternoon, under Scardino’s cross-examination, the accountant admitted he fainted after a nerve-wracking interview in 2010 by an Internal Revenue Service criminal investigator.
He also admitted to walking out of SFG’s Houston headquarters with a crucial computer memory device – called an external hard drive – the day federal agents raided the facility and told employees to leave everything in place.
“The Football,” as the device was called by those who knew its existence, contained the company’s most private financial information.
Amadio said Davis ordered the data taken off the central data system and put on a device that could not be accessed by anyone else other than a tight circle.
Scardino sought to dent Amadio’s credibility with the jury – that he was telling what the government wanted him to so to avoid any future prosecution for deeds done while he worked for SFG.
“I am telling the truth,” he said several times under Scardino’s questioning.
The defense scored some points with Amadio’s admission that he was an accountant and could never understand the passionate dreams of success held by an entrepreneur like Stanford.
Still, Amadio said, the Stanford bank never disclosed it was loaning money to the man who owned it out of client investments, and that those debts mounted into the billions before it all came crashing down.