Tuesday, 24 May 2016
Last updated 41 min ago
Jan 23 2013 | 10:02am ET
The CFO of R. Allen Stanford's empire of fraud was sentenced to five years in prison yesterday for his role in the $7 billion Ponzi scheme.
James Davis was a key witness in Stanford's trial, which resulted in the Texas financier's conviction and 110-year prison sentence. Davis described his former college roommate's "business" to the jury, noting one incident in which he was sent to London to fax a prospective client from a non-existent insurance company office, reassuring him about the safety of the investment he was contemplating.
Davis had faced up to 30 years in prison, and prosecutors had sought a decade, noting that he began cooperating only after Stanford's empire had collapsed and he had no other viable options.
"Mr. Davis for 20 years lied and deceived thousands of investors, employees and the public, and helped Allen Stanford commit one of the largest frauds in American history."
"I am ashamed and I'm embarrassed," Davis said in Houston federal court. "I've perverted what was right and I hurt thousands of investors. I betrayed their trust and also associates and neighbors and friends and my family."
Two other former Stanford executives will be sentenced next month.
Davis pleaded guilty to fraud and conspiracy three years ago. He was ordered to report to prison within 60 days, during which time he's to meet with those who have filed lawsuits stemming from the fraud.
Some of those lawsuits were filed against Stanford's former lawyers. Whether they'll be allowed will go before the U.S. Supreme Court.
The high court on Friday accepted a petition from lawyer Thomas Sjoblom, two firms he worked for, Chadbourne & Parke and Proskauer Rose, and insurance brokerage Willis Group Holdings. The state-law claims accused Sjoblom of obstructing a Securities and Exchange Commission investigation into Stanford, but Sjoblom, Willis and the law firms argue that state-law claims are barred in the matter by a federal law.
The Supreme Court could hear the case in April.