HOUSTON – James M Davis, Stanford Financial Group’s ex-finance chief, told jurors that R Allen Stanford was the mastermind and prime beneficiary of what prosecutors said was a $7 billion Ponzi scheme built on bogus certificates of deposit at Stanford’s Antiguan bank.
“Who ran the companies, you or Mr Stanford?’’ Assistant US Attorney William Stellmach asked Davis, who has been testifying under a plea agreement at Stanford’s fraud trial in federal court in Houston. “Who profited overwhelmingly from the conduct you described with the CD money?’’
“Mr Stanford,’’ Davis replied to both questions.
Davis identified a photo of an ocean-going sport yacht as one of several Stanford owned before regulators seized his assets on suspicion of fraud in early 2009. Davis told jurors today he owned a small boat on the pond at his Mississippi farm.
“Mr Stanford’s boat was 100 feet long; your boat was 12 feet long,’’ Stellmach asked Davis. “Is that a fair reflection of how this was all divvied up,’’ referring to proceeds each man realised from the alleged Ponzi scheme.
“Yes, that’s a fair reflection,’’ Davis replied. “Follow the money,’’ he added, pointing across the courtroom at his former boss.
Stanford, 61, has denied all wrongdoing and is fighting charges he mislead investors about the safety and oversight of deposits at his bank. Prosecutors claim Stanford skimmed more than $2 billion to fund a lavish lifestyle and dozens of private companies that ranged from Caribbean airlines and real estate developments to cricket tournaments.
Stanford’s attorneys presented evidence during the five days Davis spent on the stand trying to paint the ex-CFO as a thief who stole millions from Stanford’s operations and ran the companies with little input from his boss.
“He had his finger on the pulse,’’ Davis testified Wednesday, repeating previous assertions that Stanford directed him to falsify financial records, lie to Antiguan regulators and bribe bank auditors to conceal Stanford’s borrowings and keep investors’ cash flowing into Stanford International Bank.
“They were bamboozled by a smoke and mirrors show,’’ Davis said of investors who lost more than $7 billion through Stanford’s bank. “We reported to investors one way when in actuality their money was being handled the opposite way.’’ (Bloomberg)