Stanford Financial Group CFO Pleads Guilty to Charges Related to $7 Billion Scheme to Defraud Investors
James M. Davis, 60, the former chief financial officer of Houston-based Stanford Financial Group (SFG), pleaded guilty today to fraud and obstruction charges related to a $7 billion scheme to defraud investors. Davis was charged in a criminal information, filed on June 18, 2009, with conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a U.S. Securities and Exchange Commission (SEC) investigation. The criminal information also seeks forfeiture of up to $1 billion in fraud proceeds. According to the plea documents, Davis admitted that as part of the scheme, he and his co-conspirators defrauded investors who purchased approximately $7 billion in certificates of deposit (CDs) administered by Stanford International Bank Ltd. (SIBL), an offshore bank located on the island of Antigua. Davis further admitted that he and his co-conspirators misused and misappropriated most of those investor assets, including by diverting more than $1.6 billion into u...