Thursday, June 21, 2012

Former CIO of Stanford Financial Group Pleads Guilty to Obstruction of Justice

Laura Pendergest-Holt, 38, the former chief investment officer of Houston-based Stanford Financial Group, pleaded guilty today to obstructing a U.S. Securities and Exchange Commission (SEC) investigation into Stanford International Bank (SIB), the Antiguan offshore bank owned by convicted financier Robert Allen Stanford.

The plea was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell from the U.S. Postal Inspection Service (USPIS); and Chief Richard Weber, Internal Revenue Service-Criminal Investigation (IRS-CI).

Holt entered her guilty plea this morning before U.S. District Judge David Hittner. A plea agreement was also filed with the court. If the agreement is accepted by the court at Holt’s September 13, 2012 sentencing, it will result in a sentence of 36 months in prison, followed by three years of supervised release. Holt will also be subject to a fine of up to $250,000.

In January 2009, the SEC sought testimony and documents related to SIB’s entire investment portfolio. During her guilty plea, Holt admitted that despite knowing that she was incapable of testifying about the vast majority of that portfolio, Holt agreed to testify before the SEC. Holt acknowledged that her eventual appearance and sworn testimony before the SEC was a stall tactic designed to frustrate the SEC’s efforts to obtain important information about SIB’s investment portfolio, and Holt admitted that she took this action intentionally and corruptly, knowing that her testimony would impede the SEC’s investigation and help SIB continue operating.

In addition to Stanford and Holt, a grand jury in the Southern District of Texas previously indicted additional co-conspirators: Stanford Financial Group Chief Financial Officer James Davis, Stanford Financial Group former Chief Accounting Officer Gilberto Lopez, former controller Mark Kuhrt, and former head of the Antiguan Financial Services Regulatory Commission Leroy King. Stanford was sentenced last week to 110 years in prison. Davis previously pleaded guilty and faces up to 30 years in prison. The cases against the remaining defendants are still pending. They are presumed innocent unless and until convicted through due process of law.

The investigation was conducted by the FBI’s Houston Field Office; USPIS; IRS-CI; and the U.S. Department of Labor, Employee Benefits Security Administration. The case against Holt is being prosecuted by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas, Deputy Chief Jeffrey Goldberg of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorney Andrew Warren. Former AUSA Gregg Costa and Fraud Section Deputy Chief William Stellmach were also involved in this case.

The Justice Department thanks the SEC for their assistance and cooperation in this matter.

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