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Friday, February 17, 2012

Stanford CFO Forged Boss's Name, Refused Reforms, Witness Says

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.

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