Stanford Exec "Feels Awful" About $7B Scam

Alleged Ponzi Schemer's Ex-Finance Chief Expected to Take Plea Deal, Reportedly Wants to Make Amends

(AP)  The former finance chief of Texas billionaire financier R. Allen Stanford's business empire is remorseful for helping swindle investors out of $7 billion and wants to make amends for what he did, his attorney said Monday.

James M. Davis, Stanford Financial Group's ex-chief financial officer, made his first court appearance after being charged last month as part of the federal government's criminal case against Stanford.

Stanford, Davis and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt are accused of orchestrating a massive Ponzi scheme.

During a court hearing Monday, Davis pleaded not guilty to conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a Securities and Exchange Commission investigation. Davis was also granted a $500,000 bond at his hearing.

David Finn, Davis' defense attorney, said he expects his client to return to court next week and plead guilty to all three counts as part of an agreement with prosecutors.

"He feels awful he did wrong," Finn told reporters.

During the court hearing, prosecutor Gregg Costa said Davis has been cooperating with investigators for months and that a plea agreement has been worked out in the case. Costa declined to comment after the hearing.

Finn said Davis, 60, has been helping investigators in their attempts to locate missing money that was taken from investors. Prosecutors say nearly $1.2 billion of the $7 billion Stanford and his co-defendants are accused of bilking from investors can't be accounted for.

"Words can't express the sorrow he feels for letting all those people down," Finn said.

Davis did not speak with reporters after he posted bond and left the courthouse.

Finn said Davis' plea agreement does not guarantee he will get a reduced sentence. Davis faces up to 20 years in prison for the most serious charge against him.

"Obviously you're hoping down the road your cooperation will be appreciated by the government or by the trial judge," Finn said.

Prosecutors allege Stanford and the executives at his now-defunct Houston-based Stanford Financial Group misused most of the $7 billion they advised clients to invest in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua.

They are accused of misrepresenting the bank's financial condition, its investment strategy and how it was regulated.

"This thing was smoke and mirrors and duct tape for the last 15 years," Finn said of Stanford's business empire.

Stanford, Pendergest-Holt, Lopez and Kuhrt pleaded not guilty last month to the charges in a 21-count indictment issued June 18. Stanford is being held without bond while the other three are free on bond.

Investigators say Stanford secretly diverted more than $1.6 billion in investor funds as personal loans to himself to pay for his lavish lifestyle.

Finn said Davis, who was Stanford's roommate at Baylor University for one semester, did not financially benefit from the scheme and currently only has $15,000 to his name.

Also indicted is Leroy King, the former chief executive officer of Antigua's Financial Services Regulatory Commission. King, accused of taking bribes from Stanford to overlook irregularities at his bank, is awaiting extradition to the United States.

Stanford, Pendergest-Holt, Lopez, Kuhrt and King are charged with wire fraud, mail fraud, conspiracy to commit mail, wire and securities fraud and conspiracy to commit money laundering.

Stanford, Pendergest-Holt and King are also charged with conspiring to obstruct a Securities and Exchange Commission investigation and obstruction of an SEC investigation.

Stanford was considered one of the richest men in America with an estimated net worth of more than $2 billion. Dick DeGuerin, his defense attorney, says his client is now penniless.

[stn_sage]

Too bad he didn't feel so terrible BEFORE he (they) got caught, huh?!

But, he's quite willing to do the 'right' thing; he's been working with prosecutors for months---so the article says! How nice!

I guess HE doesn't want to go to prison very much, does he?!

I'll be interested in seeing what type of sentence he gets! That, should be interesting.

[Louisianawoman]

I am willing to bet, that on his Worst day of "feeling really bad" he could not even come up to the level of "feeling bad" we felt February 17, 2009 when we were informed by our local news channel that a life of hard work and savings had been stolen by a group of lowlife common everyday thieves. I hope for many, many years, he will lie in his cot and picture the faces of the victims he created by greed.
Oh and by the way, Allen Stanford and Pendergest-Holt are also pathological liars. There is no depth of hell too deep for these people.

[babooph]

Ratting out the others,[politicos too],giving up total wealth,doing a stiff prison term would be a good start.

[TheMasses0009]

He sounds as sincere as Uncle Bernie.
Waterboard them all!

[whitemale08]

Another mid-level pawn kisses the ring of the British Empire of Worthless Derivatives and Credit-Default swaps and falls on the sword so Goldman Sucks and JP Morgan doesn't have to.

Stanford and Madoff gets the axe but Goldman Sucks can literly connect a funnel directly to the U.S. Treasury to off-shore accounts by rigging software to bet 'one-way' on worthless derivatives and pose as the counter-party on the other side guaranteed by government tax payer bail out money.

THE AMERICAN SUCKER IS DISTRACTED BY THIS TINY CLOWN AND LET'S GOLDMAN SUCKS GO!

THE AMERICAN SUCKER FOR GOLDMAN SUCKS....AMAZING!

[Moderatelyspeaking]

John_Merritt and I don't agree on much based on prior posts and comments. However, on this topic he and I have found common ground and I totally agree with him. Mr. Davis may you, and all other thieves associtated with you, rot in hell. You should have found the words years ago to say "I won't do this". Your words now that you are caught are meaningless.

[John_Merritt]

It's cool. We can agree to disagree, shake hands, have a drink, and keep it civil. That is the way it should be.

[bobnjersey]

["He feels awful he did wrong," Finn told reporters. ]

so ... at what point did he know that he did wrong ... and exactly when did he start feeling awful?

[oh-please]

He started feeling awful the minute he got caught!

[TheMasses0009]

Terrific!
From riches to rags and jail.
There is some justice in this world.

[John_Merritt]

Words can't express the sorrow he feels for letting all those people down," Finn said.

Well Mr. Davis, how about trying anyway. And how exactly do you propose paying back those people you ripped off? Maybe Goldman Slacks will hire you and you can ride their wave of financial success on the markets and throw in your $650,000 bonus for the next 50 years. Maybe that will help.

Until than, you and your cronies will have to accept the punishment our government deems is warranted for your crimes against humanity. I have no sympathy for those who blatantly and willfully lie, steal and cheat to get their way in life.

Sign me: Maybe you have difficulty finding the words, but I don't mince mine.

[riob678]

Nicely stated. It's a never ending amazement how contrite these crooks are after they are indicted. Surely, James Davis knew the company was a sham. A first-year college accounting student would have discerned the oddities in the financials. But, the easy money and high living tempt people beyond their ability to resist. It's also fueled by the adolescent myth that so many have not outgrown: invincibility. A 60 year-old man did know better. Mr. Davis can save his feelings for the justice department; he's a scoundrel by any measure. Al Capone begins to look like a man of honor compared to these thieves.