Yes, sir, your honor, I did it – James Davis

HOUSTON, Texas – An emotional James M. Davis told a federal courtroom full of lawyers and reporters today that he conspired and obstructed a federal investigation into the $8 billion scheme of Stanford Financial Group.

“Guilty, your honor,” the 60-year-old Davis said to U.S. District Judge David Hittner, who had asked him how he pleaded to a three-count accusation, known as an “information.”

Davis was accused separately in the Stanford scandal apparently because he came forward earlier this year and offered his cooperation to the Securities & Exchange Commission, which was investigating the collapse of the international investment company, his attorney David Finn of Dallas said.

Thousands of Stanford International Bank Ltd. CD investors woke up in February to learn they had lost all or some of their money.

With his wife, Lori, seated in the audience, a thin-looking Davis heard the prosecution say he could expect a sentence guideline so high, it’s over the maximum.

However, Assistant U.S. Attorney Gregg Costa told Hittner the government may come back later and ask for some leniency, if Davis cooperates and testifies at trial in a substantial way.

Davis pleaded guilty to three counts – conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct an SEC investigation.

He faces a maximum of 30 years in prison on all those counts, plus $750,000 in fines, although Costa noted an “alternative fine” of $1 billion that Davis has agreed to help locate. Finn said Davis does not have $1 billion personally.

“He knows he’s going to do jail time,” Finn said.

Outside the courthouse in downtown Houston, Finn also told reporters that the currently indicted Stanford executives may not be the final people accused in the scandal. “If you read the plea agreement very carefully,” he said, “I think you’ll be able to see that not all the shoes have dropped yet.”

Indicted in the financial scandal are former Stanford executives CEO Sir R. Allen Stanford, Chief Investment Officer Laura Pendergest-Holt of Baldwyn and two others, plus Antiguan financial regulator Leroy King. All except King have pleaded not guilty.

King’s extradition from Antigua is anticipated soon, Finn said.

Stanford is the only one not out on bond.

“Court-itis” is how one prosecutor described news that Stanford was admitted to a Conroe, Texas, hospital about 5:30 a.m. today with an irregular heart beat.

Finn said Stanford’s symptoms most likely are related to his anticipation of facing Davis in court today.

Stanford was expected for a hearing over freeing up money to pay his legal fees. His and other defendants’ assets were frozen months ago by a court-appointed receiver.

Stanford’s attorney, Dick DeGuerin of Houston, however, said Davis is the man at the center of the scandal.

“You want to know where the money is?” DeGuerin asked reporters. “Go to Tupelo.”

NEMS Daily Journal reporter Patsy R. Brumfield is the only Northeast Mississippi media representative in Houston for the court proceedings. Follow here for live updates in the blog link below.

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Read more Friday in the NEMS Daily Journal newspaper.

Patsy R. Brumfield / Daily Journal