Friday, September 18, 2009

Ex-Stanford Group CFO Pleas Guilty in $7B Ponzi Scheme

James Davis, a former Stanford Group chief financial officer, pleaded guilty to fraud charges in a Houston federal court on August 27, 2009. The plea is the first arising from the alleged $7 billion investment scheme at the financial group. According to the Department of Justice, Davis has agreed to cooperate with their ongoing investigation in return for an eventual sentencing reduction.

Davis was charged in June 2009 with mail fraud, conspiracy to obstruct an SEC investigation, and conspiracy to commit mail, wire, and securities fraud.

According to sources, Davis admitted in his plea agreement that he and others defrauded investors who bought $7 billion in certificates of deposit administered by the Stanford International Bank Ltd. He also admitted to misappropriating many of those assets, including diverting $1.6 billion for personal loans.

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