HOUSTON (AP) — Jailed Texas financier R. Allen Stanford ran his business empire through a mix of flattery and fear, the man who was in charge of the tycoon's books told jurors on Thursday.
James M. Davis, the former chief financial officer for Stanford's companies, described the financier's management style as charismatic but also dictatorial.
"In his charismatic way, he controlled by money, flattery, intimidation and fear," a frail-looking Davis, 63, said during Stanford's fraud trial.
Prosecutors allege Stanford masterminded a fraud in which he bilked investors out of more than $7 billion in a massive Ponzi scheme centered on the sales of certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua. Authorities allege he used depositors' money to fund his businesses and his lavish billionaire lifestyle. They also allege he lied to depositors by telling them their funds were being safely invested.
Stanford's attorneys contend the financier was a savvy businessman whose financial empire, headquartered in Houston, was legitimate. They have suggested Davis, who worked more than 20 years for Stanford, is behind the fraud.
Stanford is on trial for 14 counts, including mail and wire fraud, and faces up to 20 years in prison if convicted.
Davis, the prosecution's star witness, told jurors he committed crimes by overstating the value of investments made by Stanford's bank and lying about what those investments actually were.
Davis pleaded guilty in 2009 to three counts: conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a Securities and Exchange Commission investigation. The plea is part of a deal Davis made with the Justice Department in exchange for a possible reduced sentence.
Davis, who was Stanford's roommate at Baylor University for a semester in 1973, testified that the financier told him one of the reasons why he set up his bank in Antigua was because he feared U.S. regulators wouldn't allow him to run a bank because of a personal bankruptcy related to some failed fitness centers.
"He did not feel he could go through that rigorous regulator vetting," he said.
Stanford was once considered one of the United States' wealthiest people, with an estimated net worth of more than $2 billion. He's been jailed without bond since being indicted in 2009.
There are no comments yet