A former top lieutenant to imprisoned financier R. Allen Stanford pleaded guilty Thursday in Houston to obstructing the Securities and Exchange Commission inquiry that led to the downfall of his global empire. Laura Pendergest-Holt, 38, spoke in a soft, tremulous voice as she answered a federal judge’s pointed questions about her role in the multibillion-dollar fraud. She was chief investment officer of Stanford Financial Group, an international financial services company based in Houston. “I knew I was delaying the SEC,” she told U.S. District Judge David Hittner, providing the only real drama in the half-hour court hearing. hlt stanf In return for her guilty plea, and her agreement to forgo any appeal, the government said it would drop the remaining 20 criminal charges against Pendergest-Holt. Prosecutor Jason Varnado recommended a three-year prison sentence. The obstruction charge carries a maximum sentence of five years in prison and a $250,000 fine. Hittner accepted the guilty plea and announced a Sept. 13 sentencing hearing. In the meantime, federal probation officials will prepare a pre-sentence report for the judge. Pendergest-Holt, attired in a black pantsuit, white jacket and flats, was allowed to remain free on bond. She left the courtroom in the company of her husband and attorney.


Ex-Stanford executive pleads guilty to obstruction

Associated Press
HOUSTON – Disgraced Texas financier R. Allen Stanford’s former chief investment officer for his now defunct financial empire pleaded guilty Thursday for her role in helping the once jet-setting businessman bilk investors out of more than $7 billion.
A tearful Laura Pendergest-Holt changed her original not guilty plea a week after Stanford was sentenced to 110 years in prison following his conviction on fraud-related charges for orchestrating one of the biggest Ponzi schemes in U.S. history.
As part of an agreement with federal prosecutors, Pendergest-Holt, 38, pleaded guilty to one count of obstruction of a U.S. Securities and Exchange Commission proceeding in exchange for a three-year prison sentence. The obstruction count carries a maximum prison term of five years. As part of the plea deal, prosecutors will drop 20 other counts, including conspiracy, wire and mail fraud.
U.S. District Judge David Hittner said he will consider the deal, including the sentencing recommendation, when he sentences her on Sept. 13.
Pendergest-Holt, a native of Baldwyn, Miss., her attorney, Chris Flood, and prosecutors all declined to comment after the hearing.
Prosecutors said Stanford, 62, used the money from investors who bought certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua to fund a string of failed businesses, bribe regulators and pay for a lavish lifestyle that included yachts, a fleet of private jets and sponsorship of cricket tournaments. The one-time billionaire was convicted in March on 13 of 14 fraud-related counts
Prosecutors said Stanford lied to investors from more than 100 countries, telling them their funds were being safely invested in stocks, bonds and other securities.
During Thursday’s court hearing, Pendergest-Holt admitted she gave the impression to investors and employees that she knew what assets made up the bank’s investment portfolio, which was divided into three tiers. According to authorities, Pendergest-Holt didn’t know most of the bank’s assets were tied up in Tier 3, which was made up of real estate purchases whose value had been overinflated by billions and by up to $2 billion in personal loans to Stanford.
“Her management of (the bank’s) investments was confined to Tier 2, which made up only about 12 percent of the bank’s assets,” said prosecutor Jason Varnado.
When the SEC began investigating, officials say Stanford, Pendergest-Holt and other company executives conspired to hide the bank’s true financial health and provide misleading testimony to the federal agency in 2009.
During the court hearing, Hittner prodded Pendergest-Holt to offer details of her actions, asking her to “tell me what you did.”
Pendergest-Holt, who was the first person indicted in the case, told Hittner she was not completely truthful with the SEC when she testified before the agency in Fort Worth, Texas, in February 2009, a week before authorities shut down Stanford’s companies.
“I knew I was delaying” the SEC’s investigation, she said.
Varnado told Hittner that at least $350,000 that had been held by Pendergest-Holt was frozen by a U.S. receiver who took over Stanford’s companies and those funds will be given to victims.
During Stanford’s trial, the financier’s defense attorneys had tried to use an affair Pendergest-Holt had with James M. Davis, the former chief financial officer for Stanford’s companies and the prosecution’s star witness, to discredit Davis, who has pleaded guilty and faces up to 30 years in prison.

Pendergest-Holt had been set to go to trial in September with two other indicted ex-executives — Gilbert Lopez, the ex-chief accounting officer, and Mark Kuhrt, the ex-global controller. Lopez and Kuhrt are still set for trial. A former Antiguan financial regulator was also indicted and awaits extradition to the U.S.

URGENT! Submit your Comments to Prosecutors on Pendergest-Holt proposed Lenient Sentence

Below are the court papers for the Plea Bargain of Prendergast Holt. The court is asking for our comments about this. PLEASE, we don’t have much time but it is imperative that we send emails expressing our disgust at this light sentencing. REMEMBER….we have already served 3 1/2 years and we still have many years to go before we can see any sign of freedom from our forced poverty. WE need to make clear to Judge Godbey that it is grossly unfair for PH to walk away with such a lenient sentence and we also need to request that she forfeit all her property, and money…after all it was the victims who paid for her lifestyle!! 
On June 18, 2012, the United States District Court for the Southern District of Texas issued a Notice of Setting indicating that on June 21, 2012, at 11:00 a.m., the defendant Laura Pendergest-Holt is expected to plead guilty to resolve the pending charges against her in the above-referenced case. At that time, Holt will enter into a plea agreement with the government pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure. Under that rule, the government agrees that a specific sentence or sentencing range is the appropriate disposition of the case, or that a particular provision of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply. Such a recommendation or request binds only the court once the court accepts the plea agreement at sentencing. To resolve the pending charges against her, the defendant Laura Pendergest-Holt is expected to plead guilty to Count Twenty of the Indictment, charging Obstruction of Justice, and the government has agreed that a sentence of 36 months of imprisonment, followed by a three-year term of supervised release, is the appropriate disposition of the case. She will also be subject to a fine, to be determined by the Court.
In light of this recent development, and in order for us to learn if you have any views in regard to any such plea, please submit your views to the prosecutors handling this investigation, by providing comments to Pam Washington at  1-888-549-3945  or via email at victimassistance.fraud@usdoj.gov, no later than 5:00 p.m. EST on June 20, 2012. Also, in accordance with the Order Authorizing Compliance with the Justice for All Act issued in this case on June 16, 2010, any victim wishing to appear and to be heard by the Court at the plea hearing must notify Pam Washington at victimassistance.fraud@usdoj.gov by the same June 20 deadline. However, as the defendant Laura Pendergest-Holt is pleading guilty under Rule 11 (c)(1)(C), and her plea agreement will not be accepted until the time of sentencing, the government will continue to accept comments concerning the plea after the June 20 deadline and up until 30 days before sentencing. The Court will later rule on whether, and the manner in which, victims may be heard at the sentencing proceeding. Lastly, because this plea agreement was reached recently, and because the precise language of the plea agreement is still being finalized, the executed plea agreement will be filed publicly following the June 21, 2012 hearing.

Stanford Officer Pendergest Holt Said to Have Plea Deal

By Laurel Brubaker Calkins and Andrew Harris
Laura Pendergest Holt, the former chief investment officer for R. Allen Stanford, has agreed to plead guilty and serve three years in prison for her role in a $7 billion fraud, three people familiar with the matter said.

Pendergest Holt, 38, will plead guilty to a single obstruction charge, said one of the people, all of whom asked not to be identified because the plea agreement isn’t public.

She faces a September trial on charges related to those that resulted in Stanford being sentenced on June 14 to 110 years in prison. Prosecutors had requested a maximum sentence of 230 years against Stanford, based on investors’ losses on bogus certificates of deposit sold by Antigua-based Stanford International Bank Ltd.

Pendergest Holt has denied wrongdoing. Dan Cogdell, her lead attorney, didn’t return phone and e-mail messages yesterday seeking comment on a plea agreement. Pendergest Holt is scheduled for re-arraignment on July 21 in federal court in Houston, according to court records.

Pendergest Holt had told Stanford Financial Group Co. investors and the firm’s financial advisers that she oversaw a stable of international money managers who were responsible for the bulk of the bank’s assets, according to court papers. She may have had authority over as little as 20 percent of the bank’s assets, according to testimony during Stanford’s trial.

Three-Year Affair

Prosecutors charged her in June 2009 with conspiring to mislead investors in conjunction with Stanford and Chief Financial Officer James M. Davis, her boss and former lover. During Stanford’s trial, Davis told jurors he had a three-year affair with Pendergest Holt that ended in 2003, and that Stanford approved of the romance between his two top deputies.

Alisa Finelli, a Justice Department spokeswoman, declined to comment on the reported plea agreement.

Stanford, 62, was convicted in March by a federal court jury in Houston of leading a massive fraud in which later investors’ funds were used to pay above-market returns to earlier investors. He was accused of secretly borrowing more than $2 billion in depositors’ funds to finance a lavish lifestyle and several money-losing businesses.

Stanford is appealing his March 6 conviction and his sentence.

Joan Stack, former global human resources manager at Stanford Financial Group, testified during Stanford’s trial that Davis and Pendergest Holt routinely hired unqualified relatives and fellow church members to staff most positions in the Memphis, Tennessee, research division that oversaw the bank’s multibillion-dollar investment portfolio.

“They were family members who had no experience in doing what we’d hired them to do,” Stack said.

Holt invested about $2 million of the bank’s portfolio in a hedge fund run by her husband, a former personal trainer, according to testimony.

The case is U.S. v. Stanford, 4:09-cr-0342, U.S. District Court, Southern District of Texas (Houston).

Statement from Grant Thornton

Dear SIB Depositor:

We noted with great interest the 110 year sentence given to Robert Allen Stanford yesterday. While this sentence does not begin to make up for the pain and suffering that you have experienced, we are confident that justice has been served at least in that regard. We remain committed, as the Joint Liquidators of the Stanford International Bank, to run the Estate as efficiently and effectively as possible. We are working hard to marshal and liquidate assets and pursue claims on your behalf. Our goal is to make a prompt and fair interim distribution to you as soon as possible and hopefully by as early as September 30 of this year if we can convince the US Department of Justice to drop their freeze on the funds in Europe and Canada.
As always, please direct your questions to us at: stanford.claims.support@uk.gt.com.

Marcus Wide and Hugh Dickson, SIB Joint Liquidators

Allen Stanford Sentenced to 110 Years in Prison

By Walter Pavlo,
 Dressed in green prison fatigues, R. Allen Stanford entered a federal courthouse in Houston today to hear U.S. District Judge David Hitner pronounce his prison sentence. The decision: 110 years.

 Prosecutors had asked that the one-time billionaire financier get 230 years in prison. (note: Bernard Madoff is serving 150 years). The prosecutor told Judge Hitner, “230 years will not get anyone their money back but on sleepless nights they will know that he got the maximum.” I think 110 years will give them just as much comfort.

 During the proceeding, Stanford’s attorney, Ali Fazel, objected to the use of the term “Ponzi scheme,” but Hittner said the evidence at trial justified the use of the term. It’s not like Stanford could be any more insulted. The prosecutors also compared him to Bernie Madoff. That too caused Fazel to speak up on behalf of Stanford by saying of Madoff, “he didn’t invest time in anything.” Not sure what he was going for with that comment but I took it that Stanford worked harder at his fraud than did Madoff.

Speaking on his own behalf, Stanford recounted his last three years, including his beating in September 2009. The best that he could say as a compliment for those who prosecuted him was, “I wouldn’t wish this on them.” While he acknowledge that he felt sorry for depositors, employees and his own family for the failure of Stanford Financial, he managed to slip in, “I’m not a thief,” and, “I never defrauded anyone.” Victims in the courtroom, all dressed in black, begged to differ.

The prison sentence represents a long fall from the once knighted Antiguan, who has been in prison since his arrest in June 2009. Declared indigent by the court, all of Stanford’s assets were frozen and he was represented by a public defender. In March, Stanford was found guilty of running a $7 billion Ponzi scheme. However, his road to the courthouse was not without controversy. First, there was that strange interview on CNBC in which Stanford proclaimed his innocence. Then Stanford sued Lloyd’s of London, the underwriter of Stanford Financial Group’s Directors and Officers insurance, to pay for his legal fees. In the end, Lloyd’s won and Stanford got the legal help of public defenders Ali Fazel and Robert Scardino.

Stanford learned that prison can be a difficult place to live. Long before being tried in court, Stanford was severely beaten by another inmate. He was hospitalized and later transferred to a federal prison medical facility in Butner, NC, as result of an addiction to anti-depressants, which he developed after the beating. The trauma, his lawyers claimed, left their client unable to remember anything. After a year’s delay in heading to trial, government psychologists determined he was faking it and set a court date.

 In January, just 12 days before Stanford’s trial was to begin, Fazel and Scardino wanted out of the case on the grounds that budget restrictions were hurting their ability to defend him. Prior to that, a number of supporting groups and expert witnesses for the defense said that they too wanted to quit because they were not being paid by the government. Eventually, some money was released and Stanford was off to trial.

With all of this drama, there still has been no distribution of the funds that have been seized by the government to victims who had invested their savings with Stanford in the hopes of incredible returns on safe (certificates of deposit) investments. The trial and the prison sentence will bring some closure, but the restitution to investors will come up a little short. With regard to the losses for U.S. taxpayers? We will be paying for Stanford’s prison stay and his future legal fees. Stanford is planning to appeal and the court will be giving him a new public defender.

Stanford’s most memorable statement was, “If I live the rest of my life in prison …. I will always be at peace with the way I conducted myself in business.” He can think about that one for a while.

 My thanks to Twitterers Ronnie Crocker and CNBC’s Scott Cohn, who gave us all updates during the sentencing.