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Lawyer: Stanford Is No Madoff

POSTED: 06:18 PM ET, 03/26/2009 by Amanda Zamora

Houston criminal defense attorney Dick DeGuerin isn't wasting anytime slamming the Securities and Exchange Commission as he gets down to work for his latest high-profile client.

"This is not a Ponzi scheme," DeGuerin said of R. Allen Stanford, who is accused of orchestrating an $8 billion investment fraud along with his chief financial officer, James M. Davis, and chief investment officer, Laura Pendergest-Holt.

In an interview with BusinessWeek's Matthew Goldstein, DeGuerin accused the SEC of "using Stanford as a distraction from its failures in Madoff."

"The SEC has cremated the Stanford companies and Stanford, partly to get over the embarrassment at their lack of oversight in the Madoff case," DeGuerin told Bloomberg's Laurel Brubaker Calkins. "This is not a Madoff situation, this was not a Ponzi scheme at all," DeGuerin told the Houston Chronicle. "There were hard assets for every dollar invested." And in an exchange with TPMuckraker's Zachary Roth, DeGuerin compared the SEC to "a bunch of Storm Troopers" who raided Stanford's offices last month, causing investors to panic.

The SEC amended its civil complaint against Stanford Feb. 27 to accuse him of conducting a "massive Ponzi scheme," in which he and Davis allegedly skimmed $1.6 billion in cash through personal loans to Stanford.

Davis, who initially invoked his Fifth Amendment right against self-incrimination, met yesterday with investigators in the case. Afterward, his lawyer depicted him as a "whistleblower", according to Bloomberg.

"Jim is fully and actively cooperating, and trying to get investors who lost their money some help," said David Finn. "He's absolutely devastated, because he knows a lot of good people got hurt."

Stanford and Davis haven't yet been criminally charged, but Pendergest-Holt was arrested Feb. 26 on charges of obstructing the probe. She is now free on bail.

The Houston Chronicle has continuing coverage of the case.

By Amanda Zamora |  March 26, 2009; 6:18 PM ET
Previous: More Departures at AIG?, DEA's Surveillance Plane Problems, Madoff Spotlight Swings to Brother | Next: Star Lobbyist Closes Shop; Bank Walkaways Leave Trail of Headaches; Blame, Acclaim for KB Exec


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