R Allen Stanford was furious to learn that his finance chief, James Davis, forged his name to a 2007 employee memo abolishing a department Stanford created to “reel in” expenses, a former executive testified.
“He called me at home at 11 or 12 one evening, and he was very mad,” Linda Wingfield, Stanford’s former executive director of special projects, told jurors today at Stanford’s criminal fraud trial in federal court in Houston. “He said he did not sign it.”
Wingfield, who held a number of executive positions at Stanford’s companies over 10 years, testified that Davis refused to give the boss access to a corporate computer system with Stanford Financial Group Co’s financial records. Testifying as a defense witness, she said Davis also ignored or circumvented policies Stanford instituted to clamp down on expenditures.
“He fought us from day one, a department set up by the chairman to try to control costs,” Wingfield said of Davis. “Mr Davis was always refusing.”
Wingfield’s testimony may bolster Stanford’s defense claim that it was Davis, not Stanford, who ran the financial services empire and engineered a fraud that cost investors more than $7 billion. Davis pleaded guilty and testified as a government witness earlier in the trial, which is concluding its fourth week.
Prosecutors accuse Stanford of stealing more than $2 billion from certificates of deposit at his Antigua-based Stanford International Bank. Instead of holding investor funds in safe assets as he promised, Stanford used their money to fund an extravagant lifestyle and risky ventures including Caribbean airlines, real estate projects and cricket tournaments, prosecutors say.
Stanford, 61, has been imprisoned as a flight risk since his indictment in June 2009. If convicted of the most serious charges, he faces as many as 20 years in prison.
Robert Scardino, Stanford’s lawyer, asked Wingfield who controlled “all the financial issues, including the treasury, accounting, internal audits and investments” at Stanford’s companies.
“Mr Davis – and the insurance, too,” she said. “There was nobody else who handled all the books.”
Wingfield told jurors she believed Stanford’s court-appointed receiver duplicated efforts and wasted money during the “chaotic” period after the businesses were seized by the US Securities and Exchange Commission in February 2009.
More than 40 Stanford investors crowded into the courtroom today to mark the third anniversary of the SEC crackdown. Angie Shaw, leader of the Stanford Victims’ Coalition, said the group’s motto is “3 and $0,” meaning “three years and zero recovery” by defrauded investors.
The group had planned to wear stickers with those words to court until US District Judge David Hittner asked them not to do so, for fear of distracting the jury.
Houston investor Cassie Wilkinson, 63, said she lost $500,000 on Stanford CDs and has attended roughly 80 per cent of the trial. A video shown to jurors yesterday, depicting a luxury Antigua resort Stanford was developing with investor money, was the toughest evidence she’s seen yet, she said.
“He took our money and built another country with it,” Wilkinson said during a break in testimony. “I was fighting back tears to see the lavish way he lived his life, and now we’re left to try to scrape through the rest of ours.”
Assistant US Attorney Gregg Costa spoke with some of the investors during court breaks. “This is who we’re doing this for,” he said outside of court. (Bloomberg.com)