Stanford Executive Indicted in Probe of Alleged Ponzi Scheme
Wednesday, May 13, 2009
HOUSTON, May 12 -- The chief investment officer for Texas billionaire R. Allen Stanford's companies on Tuesday became the first person indicted in a federal investigation of an alleged massive Ponzi scheme.
A Houston federal grand jury indicted Laura Pendergest-Holt on one count of conspiring to obstruct a Securities and Exchange Commission investigation into the Stanford Financial Group and a second count of obstructing the probe.
Each count carries up to five years in prison and a $250,000 fine. Pendergest-Holt was set to appear in court on the new charges on Thursday. She remains free on a $300,000 bond issued after she was arrested in February.
Pendergest-Holt's attorney said he expects federal prosecutors will seek additional indictments against other Stanford executives.
"She will plead not guilty and looks forward to fighting the charges," attorney Jeff Tillotson said. "She was truthful in everything she did and we intend on proving that."
A Justice Department spokesman declined to comment.
The SEC has accused Stanford and his top executives of conducting an $8 billion fraud by advising clients to buy certificates of deposit at the Antigua-based Stanford International Bank.
The allegations against Pendergest-Holt in Tuesday's indictment are similar to those detailed in a criminal complaint filed in February in Dallas federal court -- where the SEC filed its lawsuit.
The indictment accuses Pendergest-Holt of lying to SEC investigators about knowing the true value of one of Stanford International Bank's largest portfolios, which contained more than 80 percent of the bank's purported investments.
The indictment also accuses Pendergest-Holt of failing to disclose to SEC investigators during a Feb. 10 interview in Fort Worth that she had previously met with Stanford officials in Miami in order to prepare for her meeting with federal investigators.
The indictment also alleges that on Feb. 12, after her false testimony to the SEC, Pendergest-Holt caused $4.3 million in bank funds to be wire-transferred to its operating account in Houston.
Stanford has said he is innocent but that he expects to also be indicted. Last month, James M. Davis, Stanford's chief financial officer, promised to fully cooperate with federal investigators.