FBI agents late Thursday arrested Stanford Financial Group’s Chief Investment Officer Laura Pendergest-Holt on a criminal complaint charging her with obstructing the federal fraud case against Stanford.
She was arrested in Houston, Texas – where Stanford is headquartered – and will make her initial appearance today at the federal courthouse there.
Pendergest-Holt, a Baldwyn resident, was one of three Stanford executives charged on Feb. 17 by the U.S. Securities and Exchange Commission with defrauding investors and account holders of at least $8 billion in deposits. Civil charges also were lodged against Stanford Financial Group CEO Robert Allen Stanford and Stanford Chief Financial Officer Jim Davis, a Baldwyn native.
As of Thursday night, Pendergest-Holt was the only executive facing criminal charges in connection with the alleged fraud.
When the Daily Journal contacted Jim Holt, Pendergest-Holt’s husband, by phone late Thursday, he said he had “no idea” about the arrest. “I’m trying to figure this out myself.”
He said he was not in Houston with his wife, and said he wasn’t at the couple’s home in Baldwyn.
He declined to comment further.
In a press release, the FBI said Pendergest-Holt’s criminal complaint is “merely an accusation based on a finding of probable cause by a magistrate judge, and the defendant has not been indicted by a grand jury. The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”
Jacob Frenkel of Rockville, Md., a former federal criminal prosecutor who worked for almost 10 years with the SEC enforcement division said in an interview that the criminal complaint sends two messages.
First, Frenkel said it means that there will be criminal cases stemming from the fraud allegations.
Second, he said federal prosecutors “want to find both the weaker links in the chain and people they can leverage against more senior corporate officials.”
“This is a printed invitation to Ms. Pendergest-Holt to get on the government’s train or be run over by it,” he said. “Clearly they’re sending her a very strong message. The feel of handcuffs, even before formal charges are brought, has a very sobering effect.”
After Pendergest-Holt was arrested, her attorney, Brent Baker, told The Associated Press, “She is looking forward to working with the government to get all the facts out and put this behind her.”
According to the complaint, the 1991 Baldwyn High School grad made “several affirmative misrepresentations to the SEC in order to obstruct its investigation.”
The FBI alleges that Pendergest-Holt met with several Stanford corporate officers in Miami in early February to prepare for her testimony with the SEC. The FBI alleges that at the meeting she discussed the Stanford International Bank’s Tier III Portfolio and a $1.6 billion loan to a shareholder from the Tier III Portfolio. According to The Associated Press, the portfolio represented about 81 percent of the bank’s portfolio.
The complaint alleges that when Pendergest-Holt met with SEC investigators she made “several misrepresentations under oath,” including her alleged failure to reveal that she had participated in the Miami preparation session.
“Pendergest-Holt also allegedly misrepresented her own preparatory work for the testimony, saying she had met with no one other than the attorney as she worked to ready herself for the session with the SEC,” according to the FBI release.
The complaint alleges that she failed to tell investigators during testimony that she was a member of the Stanford International Bank’s investment committee or the extent of her knowledge of the bank’s Tier III Portfolio.
The complaint also says during an interview on Feb. 17 with the SEC in Memphis, Pendergest-Holt “continued to obstruct the SEC’s investigation by saying she had no knowledge of the Tier III Portfolio.”
Carlie Kollath/Daily Journal