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."
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