Baldwyn’s James M. Davis, chief financial officer for scandal-ridden Stanford Financial Group, is expected to plead guilty to federal charges associated with an alleged $7 billion Ponzi scheme, a source close to the case says.
Friday, Davis was accused of conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a Securities amp& Exchange Commission investigation.
He faces 30 years in prison and huge financial fines associated with the charges.
Davis’ formal charges were in what’s called an “information,” a charge that doesn’t come from a grand jury, as an indictment does.
“When you’re charged with an information, that pretty well means you’ve agreed to plead guilty,” said an attorneyMike Tonos 6/22/09, whose office bans public comment about its cases.
Davis’ attorneys have said he is cooperating with the investigation of SFG and other company officials indicted last week on multiple charges that they conspired to defraud investors of SFG’s parent company, Stanford International Bank Ltd., based on the island of Antigua.
Davis’ initial appearance in the U.S. District Court of the Southern District of Texas is set for 10 a.m. July 1 before Magistrate Judge Calvin Botley in Houston.
Laura Pendergest-Holt, a Baldwyn native, is one of five co-defendants named in the document made public last Friday.
The indictment charges CEO R. Allen Stanford and other executives, except Davis, of falsely claiming to have grown $1.2 million in assets in 2001 to roughly $8.5 billion by the end of 2008 largely on the sale of certificates of deposit. Officials said the operation had some 30,000 investors.
Stanford is expected to face a hearing in Houston today. Last week, he surrendered to the FBI, and a federal judge in Virginia ordered him jailed because he posed a flight risk.
Holt, SFG’s chief investment officer, is scheduled to answer charges Thursday in Houston on 21 counts she participated in the conspiracy and other acts associated with the alleged scheme. In February, she pleaded not guilty to conspiracy and obstruction charges.
She is accused with Stanford, accountans Gilberto Lopez and Mark Kuhrt, and Leroy King, CEO of Antigua’s investment regulatory agency.
If convicted on all counts, they face up to 300 years in prison and millions of dollars in fines.
Now living in North Carolina, Holt is expected to plead not guilty and remain free on $300,000 bond. Lopez and Kuhrt are free on $100,000 bond each.
A separate indictment unsealed in Florida accused a fourth Stanford worker, Bruce Perraud, of destroying records important to the investigation.
King is accused of accepting more than $100,000 in bribes to help Stanford continue his fraud.
Contact Patsy R. Brumfield at (662) 678-1596 or firstname.lastname@example.org.
Patsy R. Brumfield/NEMS Daily Journal