James M. Davis, the Stanford Group Co. chief financial officer accused by federal regulators of helping his boss, R. Allen Stanford, run a multibillion-dollar Ponzi scheme, will enter plea negotiations with prosecutors.
Davis was sued by the U.S. Securities and Exchange Commission along with Stanford. Davis will negotiate to resolve potential criminal and civil liability related to a suspected $8 billion Ponzi scheme, his attorney said.
“We anticipate beginning those conversations as early as next week,” David Finn, Davis’s lawyer, said yesterday in a phone interview. “Things are accelerating rapidly. We are starting to shift gears and starting to look forward for a resolution.”
The SEC sued Stanford, Davis, Chief Investment Officer Laura Pendergest-Holt and three affiliated companies, accusing them of running a “massive ongoing fraud” selling certificates of deposit through Antigua-based Stanford International Bank.
Davis, 60, began cooperating with federal investigators March 25, Finn said. Until now, discussions focused exclusively on helping to locate Stanford assets around the world, including about $105 million in Stanford-linked London bank accounts frozen last week by a U.K. High Court order.
“We’ve not had plea negotiations to this point, but we’re making plans to start going down that road,” Finn said. “Thus far virtually all of the time that we’ve spent with the SEC and DOJ investigators has focused on locating assets and helping them understand what did and did not happen.”
‘Most Pressing’
Neither Stanford nor Davis has been charged with a crime. Finn said insuring that talks resolve any potential criminal charges Davis faces would “obviously be the most pressing concern.”
“We’d love to wrap it all up at once,” Finn said. “Our priority will be on the criminal front. The tail won’t be wagging the dog, and the SEC case would be the tail in this situation.”
Stanford, 59, said in an April 6 interview with ABC News that he might be criminally indicted within two weeks. Dick DeGuerin, the Houston lawyer Stanford hopes to hire if he can access court-frozen funds, has denied Stanford did anything wrong.
DeGuerin said yesterday in a phone interview that he had no information on possible indictments in the case.
“We know that Davis is just rolling over and saying anything they want him to,” DeGuerin said, declining to elaborate. “And they’ve certainly been trigger-happy in this case.”
Indictment Deadline
Pendergest-Holt was charged with criminal obstruction of the investigation and released on $300,000 bail. Her lawyer, Dan Cogdell, said she is innocent. Pendergest-Holt agreed to extend until April 28 the government’s deadline for formally indicting her.
Ian McCaleb, a spokesman for the Justice Department, declined to comment on the investigation.
The SEC case is SEC v. Stanford International Bank, 09-00298, U.S. District Court, Northern District of Texas (Dallas).
To contact the reporter on this story: Laurel Brubaker Calkins in Houston at [email protected] . Last Updated: April 10, 2009 00:01 EDT
Source:http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYxVswsjWJf0
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