By Patsy R. Brumfield/NEMS Daily Journal
Prosecutors claim R. Allen Stanford started his offshore bank with a shell company he set up in the United Kingdom.
Assistant U.S. Attorney William Stellmach made that claim Wednesday while questioning Michelle Chambliess during the third day of Stanford’s trial in federal court in Houston, Texas, where he later based his financial empire.
Chambliess said Stanford used her securities license to open the first Stanford Group Co. office to sell certificates of deposit for his offshore bank.
Stanford, 61, went on trial Monday accused of 14 federal charges centered on a $7.2 billion Ponzi scheme allegedly perpetrated on certificate of deposit investors through his Stanford International Bank Ltd., originally called Guardian Bank.
Another witness, Leo Mejia, said he was hired to be president of Stanford’s Idea advertising company.
On trip to take photos of Guardian Bank in Montserrat, he said he visited the bank and was puzzled with only a few people working there and unplugged computers.
But on cross-examination, he failed to recognize a photo of that bank and admitted he lied about his education.
Earlier in the day, Stanford’s attorneys bogged down the prosecution’s timing with repeated objections to exhibits.
At the trial’s start Monday, U.S. District Judge gave each side 65 hours to present their cases and keeps up with it using a chess timer.
Prosecutors complained that the objections were a defense tactic to waste their allotted time.
Among the government’s list of 400 exhibits are Stanford’s address/phone book, a promissory note for $114 million and a payment schedule on a yacht.
Chambliess testified that she was a sales representative for Guardian and pitched its certificates of deposit to customers.
Guardian’s controller was James M. Davis, who lived west of Baldwyn and worked in Stanford’s Tupelo and Memphis offices. He later became Stanford Financial Group chief financial officer and right-hand man for his former college roommate, Stanford.
Davis pleaded guilty to his participation in the financial fraud and is expected to take the stand against Stanford possibly as early as next week.
The trial is likely to last six to eight weeks.
Chambliess told the 15-member jury she was “bothered” that Guardian had no board of directors to oversee the bank’s business. She also testified that she understood the bank to be established off-shore to avoid U.S. taxes, FDIC insurance and federal requirements that banks hold back money in reserve.
Chambliess said she was fired in 2002, after almost 15 years with Stanford.
She said at the time she was looking for a job after Stanford told her to “do whatever you need to do” to land a client.
The Associated Press contributed to this report.