Ex-Stanford exec enters plea in swindle case

HOUSTON — The former finance chief of Texas billionaire financier R. Allen Stanford's business empire is remorseful for helping swindle investors out of $7 billion and wants to make amends for what he did, his attorney said Monday.

James M. Davis, Stanford Financial Group's ex-chief financial officer, made his first court appearance after being charged last month as part of the federal government's criminal case against Stanford.

Stanford, Davis and executives Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt are accused of orchestrating a massive Ponzi scheme.

During a court hearing Monday, Davis pleaded not guilty to conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a Securities and Exchange Commission investigation. Davis was also granted a $500,000 bond at his hearing.

David Finn, Davis' defense attorney, said he expects his client to return to court next week and plead guilty to all three counts as part of an agreement with prosecutors.

"He feels awful he did wrong," Finn told reporters.

During the court hearing, prosecutor Gregg Costa said Davis has been cooperating with investigators for months and that a plea agreement has been worked out in the case. Costa declined to comment after the hearing.

Finn said Davis, 60, has been helping investigators in their attempts to locate missing money that was taken from investors. Prosecutors say nearly $1.2 billion of the $7 billion Stanford and his co-defendants are accused of bilking from investors can't be accounted for.

"Words can't express the sorrow he feels for letting all those people down," Finn said.

Davis did not speak with reporters after he posted bond and left the courthouse.

Finn said Davis' plea agreement does not guarantee he will get a reduced sentence. Davis faces up to 20 years in prison for the most serious charge against him.

"Obviously you're hoping down the road your cooperation will be appreciated by the government or by the trial judge," Finn said.

Prosecutors allege Stanford and the executives at his now-defunct Houston-based Stanford Financial Group misused most of the $7 billion they advised clients to invest in certificates of deposit from the Stanford International Bank in the Caribbean island of Antigua.

They are accused of misrepresenting the bank's financial condition, its investment strategy and how it was regulated.