It takes some of these long trials to get going, but the Allen Stanford trial ramped up big this week.
On Tuesday, Stanford, if he did not know it already, had really ticked off a woman in Antigua. Marian Althea Crick said she remembers Allen Stanford as trying to use his charm to pursuade her to overlook regulations in the small island nation where she was a director of a regulatory agency that oversaw financial institutions like Stanford's bank he opened there in the 1990's. Ms. Crick, who is now chairman of the Financial Services Regulatory Commission in Antigua, said she complained to Antiguan authorities when Stanford was also put on the board that regulated banks in Antigua....a clear conflict. Her quote on the stand was, "It reminded me of a saying we have at home, it was a classic case of the rat being put in charge of the cheese." However, there was no clear violation that she could point to that incriminated Stanford...but the there is plenty of that to come in this trial. You have to admit, once you clear out the regulators, it looks like you set the stage for some big things.
Crick resigned as a regulator in 2002 and was replaced by Leroy King. King was accused of taking a part in hiding Stanford's alleged fraud as well as a few million dollars in payments from Stanford financial....along with a few Super Bowl tickets (tis the season). King is still in Antigua fighting extradition to the U.S. to face charges.
Another witness for the government was Mark Collinsworth, who was a research analyst at Stanford Financial Group, Co. in the U.S. Collinsworth painted a picture of Stanford as not being that engaged with the business and that he never received any direction from Stanford to falsify financial statements. He also said that James Davis, former CFO at Stanford and is cooperating with government, had hired people who had no business working for a financial institution. Davis once hired one of his former farm hands as a commodities analyst and his preacher as an analyst for Middel Easter affairs. What's the harm if the whole thing was a fraud.
And what is a good fraud if you can't have some fun in the midst of it. Henry Amadio, a former accountant for Stanford in Houston, testified that he kept a secret report for Allen Stanford to track the flow of over $2 billion from the Antiguan bank to other entities controlled by Mr. Stanford. Prosecutors believe that the promises Stanford made to depositors who thought they were investing in a safe investment, was nothing but a rouse to fund yachts, homes, jets or far flung enterprises that were risky. Amadio worked directly for Mark Kuhrt at Stanford Financial. Kuhrt was arrested and charged in the scandal in June 2009, the day after Allen Stanford was arrested.
On Thursday, it was James Davis, Stanford's former roommate at Baylor, former friend and former CFO at Stanford Financial, who took the stand. Davis said in his testimony that, "I was involved in faking the numbers, but he was the chief faker." Sounds like a new business term. Davis (63), who is a government witness after pleading guilty in 2009, has a lot riding on this testimony as he is hoping to get a prison sentence that will be short enough that he can live out some of it in the free world. Davis had some admissions of his own as he talked about his 3-year affair with Stanford Financial's Chief Investment Officer, Laura Pendergest Holt. He noted that Stanford approved of the affair by saying, "That's good; she'll be loyal." Holt is still planning on going to trial later this year, so I'm sure this story is going to be repeated again in a few months.
Davis said that he knew Stanford was a fraud back in 1991 (18 years prior to his arrest), so why did he stay, "I believed in Mr. Stanford - wrongfully so.... but I continued to stay there and lie with him," he told Assistant U.S. Attorney William Stellmach under questioning.
Davis has a lot to say. He is expected to be on the stand next week as well.