Gilbert Lopez, 70, Stanford Financial Group Co.’s chief accounting officer, and Mark Kuhrt, 40, global controller, face 10 counts of wire fraud and one count of conspiracy to commit wire fraud, which could send them to prison for more than 20 years if convicted by a jury. The men pleaded not guilty when they were indicted with the Texas financier in June 2009.
The government claims the men fabricated the financial statements that enabled Stanford to lie to investors about the circumstances surrounding their investments.
The only defendant yet to face trial in the scandal is ex-Antiguan bank regulator Leroy King, still fighting extradition in the conspiracy that cost some 20,000 investors worldwide $7.2 billion.
Stanford, 62, was convicted in March of misappropriating billions from investors who bought bogus certificates of deposit from Antigua-based Stanford International Bank Ltd. The former Texas billionaire is serving a 110-year sentence in federal prison in Florida. He is appealing his verdict and sentence.
The primary evidence against Lopez and Kuhrt are e-mails in which they discussed Stanford’s unreported loans and how to value certain assets to disguise that debt in the months before U.S. securities regulators seized Stanford’s businesses in February 2009.
Lopez, Kuhrt and former Baldwyn resident James M. Davis, who was Stanford’s chief financial officer, discussed in these messages how to repeatedly flip a Caribbean resort property among Stanford entities so that its value could be inflated from $63.5 million to $3.2 billion in a matter of months, according to the indictment. The inflated value was intended to plug the hole in the books caused by Stanford’s personal loans and bad investments, prosecutors have said.
Their lawyers said prosecutors are misconstruing documents that were in draft form at the time regulators seized the company. They claim that Stanford and his accountants were in the process of consolidating the private enterprises Stanford funded with investor loans onto the bank’s balance sheet, and that they were prevented from completing the rollup by the government shutdown.
Davis pleaded guilty to his role in the fraud scheme in 2009, testified against Stanford at trial and is awaiting sentencing. Baldwyn native Laura Pendergest Holt, Stanford’s investment chief, pleaded guilty in June to obstructing a federal investigation into Stanford’s companies and was sentenced to three years in prison.