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Former Stanford CFO Pleads Guilty to Fraud and Conspiracy Charges
Due in court for hearing on representation, R. Allen Stanford hospitalized Thursday morning
Texas Lawyer
August 28, 2009
James M. Davis, the former chief financial officer for Stanford Financial Group and Stanford International Bank Ltd., pleaded guilty Thursday morning to three criminal charges in connection with the collapse of Stanford International Bank.
Davis pleaded guilty to one count of conspiracy to commit mail, wire and securities fraud; one count of mail fraud; and one count of conspiracy to obstruct SEC proceedings. He faces up to five years in prison on the two conspiracy charges and up to 20 years in prison on the mail fraud charge.
In a plea agreement Davis signed, he agreed to cooperate with the government in its investigation of an alleged $7 billion conspiracy to defraud. As part of the plea deal, he agreed to a $1 billion forfeiture judgment. The government reserves the right to ask for a "downward departure" of Davis' sentence if it determines his cooperation rises to the level of "substantial assistance."
The charges were included in an information unsealed on June 19. Also on June 19, several other individuals, including R. Allen Stanford, chairman of Houston-based Stanford Financial Group, pleaded not guilty to criminal charges.
Stanford, who is being held in a federal prison in Conroe, Texas, was supposed to appear in court Thursday morning for a hearing on who will represent him, but U.S. District Judge David Hittner of the Southern District of Texas said from the bench that Stanford was taken by ambulance to a hospital at 5:30 a.m. because of an irregular electrocardiogram and a high pulse rate.
Stanford's current attorney, Dick DeGuerin of DeGuerin & Dickson in Houston, has asked to withdraw as his lawyer because he wants a guarantee he will be paid. The hearing on whether to allow DeGuerin to withdraw will be reset. After Davis' hearing, DeGuerin said he believes stress may have caused Stanford to have medical problems Thursday.
Davis said outside the federal courthouse in Houston, "I did wrong. I'm sorry. I apologize." He also noted that he takes responsibility for his actions. Hittner scheduled Davis' sentencing for Nov. 20. But his lawyer, David Finn, a partner in Milner & Finn in Dallas, said it's doubtful Davis will be sentenced before Stanford's trial is finished. Finn said that Davis has been cooperating with the FBI, the U.S. Department of Justice and the SEC and that will continue. Finn added that Davis came to Houston Wednesday and met with the FBI and federal prosecutors.
This article first appeared on the Tex Parte blog on TexasLawyer.com.
