Defense witnesses say Stanford wasn’t hands-on boss

February 17, 2012

The Houston Chronicle on February 16, 2012 released the following:

“Defense witnesses portrayed R. Allen Stanford as distant from the day-to-day operation of his companies, as his lawyers laid a foundation Thursday for their contention that financial machinations by a star prosecution witness led to fraud charges against Stanford.

Joan Stack, who headed global human resources for Stanford’s companies in the final two years before U.S. regulators shut them down, characterized her boss as “disconnected” from much of the companies’ operations. She said he focused mostly on the Island Club, a resort for the wealthy he hoped to develop on Caribbean islands he owned.

She testified that government witness James Davis, Stanford’s former chief financial officer, worked out of an office in Tupelo, Miss. that Stanford set up to accommodate Davis, his longtime business associate and former college roommate.

Davis pleaded guilty to three felony counts and testified against Stanford during the government’s portion of the trial.

Stack described the Tupelo office as clubby, employing mostly relatives and friends of Davis or Laura Holt, former Stanford chief investment officer who is named in a separate indictment and will be tried later.

Stack said employees in Tupelo reported solely to Davis and Holt rather than to others in the company.

Kelly Bailey, a graphic designer, testified that Stanford told her to “work with Jim” on annual report numbers.

Bailey testified that Davis was “highly disrespectful” of Stanford and once mumbled under his breath “something to the effect of ‘he doesn’t know what he’s doing’” in reference to Stanford as they worked on financial reports.

She acknowledged under government cross-examination, however, that Stanford had the final say on annual reports.

Government witnesses testified earlier in the trial that they saw Stanford and Davis changing numbers on annual reports before sending them to printers, and Davis said they fabricated figures to make financial reports look more favorable.

Bailey said she also recalled last-minute changes on reports, but could not detail what they were.

Stanford is accused of running a $7 billion investor fraud through certificates of deposit issued by his Stanford International Bank in the Caribbean nation of Antigua.”

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Stanford Seeks to Delay Trial After Defense Expert Witnesses Quit Over Pay

January 3, 2012

Bloomberg on January 2, 2012 released the following:

“By Laurel Brubaker Calkins

R. Allen Stanford, accused of running a $7 billion investment fraud, asked for a three-month delay in his trial set for Jan. 23 after his expert witnesses quit over not being paid, according to court filings.

Stanford’s experts haven’t been paid for four months, Ali Fazel, Stanford’s lead criminal-defense lawyer, said in court papers filed Dec. 30 in federal court in Houston. They quit last week after the U.S. Court of Appeals, which controls budgets for Stanford’s publicly funded defense, ruled that it will “modify and limit the expert budget moving forward” and withhold payments to them until after the trial, Fazel said.

Stanford, 61, has been in custody since he was indicted in June 2009 on charges of defrauding investors through bogus certificates of deposit at his Antigua-based Stanford International Bank.

Stanford was declared mentally fit for trial on Dec. 22, after completing eight months of rehabilitation at a federal prison hospital in Butner, North Carolina. U.S. District Judge David Hittner found the former financier had sufficiently recovered from head injuries suffered in a September 2009 jailhouse assault and an addiction to anxiety drugs prescribed by prison doctors following the attack.

Fazel said in the Dec. 30 filings that prosecutors don’t oppose a one-week delay in tomorrow’s deadline for filing expert reports in the case.

Assistant U.S. Attorney Gregg Costa told Hittner last month that the government doesn’t oppose a delay of six to eight weeks in Stanford’s trial to give him more time to review documents with his attorneys.

Laura Sweeney, a Justice Department spokeswoman, declined to comment today on the request for a three-month delay, citing a gag order issued by the judge.

The case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston).”

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.