The third ranking executive of the Stanford Financial Group – Chief Investment Officer Laura Pendergest-Holt was arrested by the FBI on charges that she obstructed a government proceeding. Appearing before a federal magistrate in Houston on Friday, Pendergest-Holt is accused of making “several affirmative misrepresentations” to SEC investigators who were seeking to learn about a scheme to defraud investors and account-holders of billions of dollars in deposits.
The FBI and IRS are actively conducting a criminal investigation(s) of Stanford’s allegedly fraudulent dealings, which was confirmed in court documents. A CNN article reports:
“Since June of 2008 I and others on behalf of the FBI, special agents with the Internal Revenue Service, and postal inspectors have been conducting an investigation into allegations that executives of Stanford Financial Group … have defrauded investors and account-holders of more than $8 billion in deposits,” said FBI agent Vanessa Walther in an affidavit filed with the charges against Pendergest-Holt.
“We have been conducting this investigation parallel to an investigation being conducted by the Securities and Exchange Commission,” the affidavit says.
The Securities and Exchange Commission sued Pendergest- Holt, Stanford Chairman R. Allen Stanford, and Stanford Chief Financial Officer James M. Davis on Feb. 17, accusing them of misleading investors about $8 billion in certificates of deposit in Antigua-based Stanford International Bank.
Keeping in mind an arrest is not a conviction, her attorney stated:
“She is extremely disappointed in the path the SEC and law enforcement are taking,” said Pendergest-Holt’s lawyer Dan Cogdell. “She has been cooperating for weeks, and now she is falsely charged for a crime she didn’t commit.”
The full Bloomberg report is here.
Thinking that at one time she might be the one to topple the house of cards and send Stanford to prison for a very long time, one might ask if her arrest is just a ploy to put pressure on her to provide exactly what the government wants. Perhaps she did withhold data – which one can go to prison for – or perhaps it’s a power squeeze. Either way, the choices made by Pendergest-Holt in the past are surely producing consequences today – and likely will for years to come.
As a business ethics and fraud prevention speaker, one this is sure – there will be more to come….
O.K. SO HERE IS SOME MORE…
The Wall Street Journal Law Blog reports on the Pendergest-Holt criminal charges. Pulling from a story from the Northeast Mississippi Daily Journal, the WSJ Law Blog reports:
A bit strange, however, is the story’s several mentions of Pendergest-Holt’s looks. The story notes that while the Baldwyn, Miss., native, now 35, “had no financial services or securities industry experience” before joining SFG in 1997, “less than a decade later she was managing more than $15 billion in assets and running a worldwide team of equity, policy and sector anaylsts.”
According to the story, Pendergest-Holt had a “killer combination of beauty, brains and connections,” was was “an expert number-cruncher” and “has been described as strikingly beautiful and statuesque.”
Wow…I’ve heard that one should look the part, but $15 billion under management…well one would assume that there would be a string of credentials that would support such responsibility. But then, reality check, it seems that it really was all part of a big illusion. Maybe striking looks just makes the illusion easier to pull off.
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