By Laurel Brubaker Calkins - Feb 17, 2012
R. Allen Stanford was furious to learn that his finance chief, James Davis,
forged his name to a 2007 employee memo abolishing a department Stanford
created to "reel in" expenses, a former executive testified.
"He called me at home at 11 or 12 one evening, and he was very mad," Linda
Wingfield, Stanford's former executive director of special projects, told
jurors today at Stanford's criminal fraud trial in federal court in Houston.
"He said he did not sign it."
Wingfield, who held a number of executive positions at Stanford's companies
over 10 years, testified that Davis refused to give the boss access to a
corporate computer system with Stanford Financial Group Co.'s financial
records. Testifying as a defense witness, she said Davis also ignored or
circumvented policies Stanford instituted to clamp down on expenditures.
"He fought us from day one, a department set up by the chairman to try to
control costs," Wingfield said of Davis. "Mr. Davis was always refusing."
Wingfield's testimony may bolster Stanford's defense claim that it was
Davis, not Stanford, who ran the financial services empire and engineered a
fraud that cost investors more than $7 billion. Davis pleaded guilty and
testified as a government witness earlier in the trial, which is concluding
its fourth week.
Airlines, Cricket
Prosecutors accuse Stanford of stealing more than $2 billion from
certificates of deposit at his Antigua-based Stanford International Bank.
Instead of holding investor funds in safe assets as he promised, Stanford
used their money to fund an extravagant lifestyle and risky ventures
including Caribbean airlines, real estate projects and cricket tournaments,
prosecutors say.
Stanford, 61, has been imprisoned as a flight risk since his indictment in
June 2009. If convicted of the most serious charges, he faces as many as 20
years in prison.
Wingfield, who also ran some of Stanford side ventures, testified today via
a video link from federal court in Orlando, Florida. She said she was too
ill to travel.
Robert Scardino, Stanford's lawyer, asked Wingfield who controlled "all the
financial issues, including the treasury, accounting, internal audits and
investments" at Stanford's companies.
'Nobody Else'
"Mr. Davis -- and the insurance, too," she said. "There was nobody else who
handled all the books."
Wingfield told jurors she believed Stanford's court- appointed receiver
duplicated efforts and wasted money during the "chaotic" period after the
businesses were seized by the U.S. Securities and Exchange Commission in
February 2009.
More than 40 Stanford investors crowded into the courtroom today to mark the
third anniversary of the SEC crackdown.
The group had planned to wear stickers to court until U.S. District Judge
David Hittner asked them not to do so, for fear of distracting the jury.
Houston investor Cassie Wilkinson, 63, said she lost $500,000 on Stanford
CDs and has attended roughly 80 percent of the trial. A video shown to
jurors yesterday, depicting a luxury Antigua resort Stanford was developing
with investor money, was the toughest evidence she's seen yet, she said.
"He took our money and built another country with it," Wilkinson said during
a break in testimony. "I was fighting back tears to see the lavish way he
lived his life, and now we're left to try to scrape through the rest of
ours."
Assistant U.S. Attorney Gregg Costa spoke with some of the investors during
court breaks. "This is who we're doing this for," he said outside of court.
Showing posts with label Wingfield. Show all posts
Showing posts with label Wingfield. Show all posts
Friday, 17 February 2012
Jury will decide, but Stanford investors have no doubt
R. Allen Stanford's fraud trial neared the end of its fourth week Friday morning as defense lawyers built a case for his innocence in a courtroom filled with investors who believe he swindled them collectively out of millions of dollars.
About 40 investors in financial products offered by Houston-based Stanford Financial Group attended the trial to commemorate the third anniversary of the federal lawsuit that shut down Stanford's global financial operations and seized assets that may have included funds intrusted to the companies by clients.
In Friday's trial proceedings before U.S. District Judge David Hittner, Linda Wingfield, a former vice president in Stanford's operations, testified via a video link from Orlando, Fla., because she is ill and could not travel to Houston.
Wingfield testified that she went to work for Stanford in 1998 and eventually became a project manager and one of his top assistants and troubleshooters, sometimes representing him at meetings.
"He was a detail person," Wingfield testified, but over time he handed off increasing day-to-day responsibility to his chief financial officer, James Davis.
The testimony supports the defense narrative that in the years before the Stanford operations collapsed, Davis was in charge of financial transactions that prosecutors allege defrauded investors of $7 billion.
Davis pleaded guilty to three felony counts and was the star prosecution witness against Stanford, testifying that the two manipulated financial reports to conceal the funneling of investors' money to their personal use and to Stanford's pet business ventures.
Wingfield suggested in her testimony, however, that Stanford was trying to make an array of businesses profitable, and often delegated the specific tasks.
She described the shock among employees when the receiver took control of the operations three years ago Friday, and expressed bitterness at the way it was done.
"I saw multiple inefficiencies," she said, including receiver staff's confiscation of unlabeled boxes without ascertaining their contents.
"We were devastated that this company was taken apart."
Meanwhile, investors described their own devastation in interviews during courtroom breaks and as they assembled outside the courthouse.
They came from across Texas and from Louisiana, and while it will be up to a jury to determine Stanford's guilt or innocence, the investors expressed little doubt.
"I came to see the guy who stole my money," said Jim Eccles, 76, of Austin, who invested in two 5-year certificates of deposit at Stanford's offshore bank in 2007 - one for $1 million and one for $50,000. They mature next September.
"That means I'll be able to get it all back," Eccles said, laughing gamely at the reality that investors will recover little if any of their money.
"It's painful enough to lose your resources," Eccles said. "Add to that the embarrassment of the fool who is soon parted from his money."
Paul Gallagher, 64, said he and his mother-in-law lost more than half a million dollars in Stanford investments, and has received no help from the Securities Investor Protection Corp., an insurance fund operated by the industry to protect investors from losses in failed brokerage firms. It does not protect against investment losses.
The SIPC is in a dispute with the U.S. Securities and Exchange Commission over whether it must cover some losses for Stanford investors.
Gallagher said he came to court Friday to see Stanford and the dynamics of the trial first hand, and to show solidarity with others who lost money.
He said that because of his Stanford losses, he probably won't ever be able to retire.
Paul Wolfe said he has been frustrated by the long wait for some kind of restitution - either from assets controlled by the receiver or from the SIPC.
"We aren't all big wealthy investors," Wolfe said. "We're just regular people."
About 40 investors in financial products offered by Houston-based Stanford Financial Group attended the trial to commemorate the third anniversary of the federal lawsuit that shut down Stanford's global financial operations and seized assets that may have included funds intrusted to the companies by clients.
In Friday's trial proceedings before U.S. District Judge David Hittner, Linda Wingfield, a former vice president in Stanford's operations, testified via a video link from Orlando, Fla., because she is ill and could not travel to Houston.
Wingfield testified that she went to work for Stanford in 1998 and eventually became a project manager and one of his top assistants and troubleshooters, sometimes representing him at meetings.
"He was a detail person," Wingfield testified, but over time he handed off increasing day-to-day responsibility to his chief financial officer, James Davis.
The testimony supports the defense narrative that in the years before the Stanford operations collapsed, Davis was in charge of financial transactions that prosecutors allege defrauded investors of $7 billion.
Davis pleaded guilty to three felony counts and was the star prosecution witness against Stanford, testifying that the two manipulated financial reports to conceal the funneling of investors' money to their personal use and to Stanford's pet business ventures.
Wingfield suggested in her testimony, however, that Stanford was trying to make an array of businesses profitable, and often delegated the specific tasks.
She described the shock among employees when the receiver took control of the operations three years ago Friday, and expressed bitterness at the way it was done.
"I saw multiple inefficiencies," she said, including receiver staff's confiscation of unlabeled boxes without ascertaining their contents.
"We were devastated that this company was taken apart."
Meanwhile, investors described their own devastation in interviews during courtroom breaks and as they assembled outside the courthouse.
They came from across Texas and from Louisiana, and while it will be up to a jury to determine Stanford's guilt or innocence, the investors expressed little doubt.
"I came to see the guy who stole my money," said Jim Eccles, 76, of Austin, who invested in two 5-year certificates of deposit at Stanford's offshore bank in 2007 - one for $1 million and one for $50,000. They mature next September.
"That means I'll be able to get it all back," Eccles said, laughing gamely at the reality that investors will recover little if any of their money.
"It's painful enough to lose your resources," Eccles said. "Add to that the embarrassment of the fool who is soon parted from his money."
Paul Gallagher, 64, said he and his mother-in-law lost more than half a million dollars in Stanford investments, and has received no help from the Securities Investor Protection Corp., an insurance fund operated by the industry to protect investors from losses in failed brokerage firms. It does not protect against investment losses.
The SIPC is in a dispute with the U.S. Securities and Exchange Commission over whether it must cover some losses for Stanford investors.
Gallagher said he came to court Friday to see Stanford and the dynamics of the trial first hand, and to show solidarity with others who lost money.
He said that because of his Stanford losses, he probably won't ever be able to retire.
Paul Wolfe said he has been frustrated by the long wait for some kind of restitution - either from assets controlled by the receiver or from the SIPC.
"We aren't all big wealthy investors," Wolfe said. "We're just regular people."