Defense is desperate Lawyers hold back nothing in the financial Ponzi scheme case

By Lindsay Gary Published on: Monday, February 20, 2012

Stanford was charged committing a "bait and switch" international Ponzi scheme in which he allegedly conned investors out of $7 billion.

The trial, is a battleground between the government and Stanford's defense team, who seem to be trying everything possible to win this difficult case.

The defense team's tactics include trying to prove that former Chief Financial Officer of Stanford Financial Group and college roommate of Stanford, James Davis, is responsible for the alleged scheme. They also allege that had government groups, such as the U.S. Securities and Exchange Commission (SEC), not intervened, Stanford would have completed the task of paying investors back. However both are difficult to prove for various reasons.

First, although it is the CFO's responsibility to advise a company financially, Stanford was still the final decision-maker. On Friday, Feb. 3, 2012, the government presented several emails as evidence to the courtroom, including emails with subject line "Transfer of Funds TIOC" (Two Islands One Club). These were a series of emails regarding a risky business venture - building a resort in the Caribbean. Patricia Maldonado asked for the approval of $1,275,000 to go into this resort. This money came from a Societe Generale account in Switzerland that was funded by the Certificates of Deposits from investments.

Davis' alleged reply was for Maldonado to contact Stanford for approval; Stanford supposedly in turn approved this amount, and possibly many other illegal transactions such as this. Investors thought they were making secure investments but based on the evidence presented by the government, they actually weren't. In fact, the money went to millions of dollars worth of employee bonuses, bills and, not to mention, the TIOC, which was never completed.

There is no strong evidence that proves Stanford was actually in the process of paying investors back, especially when emails similar to the TIOC series were sent just weeks before Stanford was caught.

It is obvious the defense team is uneasy. Davis was Stanford's right-hand man and he has not only plead guilty but has testified against him with believable evidence.

Stanford and his defense team only revealed their poker faces. But their desperate actions, such as trying to put the blame on Davis, show their insecurity.

Not only are they trying to persuade the courtroom that a man who already plead guilty is at fault, but they even tried to call for a mistrial during recess on the grounds that Davis violated Stanford's Fifth Amendment rights.
Judge Hittner overruled that accusation against Davis and the trial continued.

After exhausting many of their options, they are still having a difficult time proving Stanford's innocence.

First the defense claimed Stanford was incompetent. Now they're blaming Stanford's employee for all the crime committed in Stanford's company. What will the defense resort to next?

With all of the evidence and witnesses the government has brought in, it will almost be impossible for the prosecution to lose this case.