The FBI has made the first arrest in the $8 billion Stanford Financial Group fraud investigation after detaining chief investment officer Laura Pendergest-Holt yesterday on federal obstruction charges.
The US Justice Department said Ms Pendergest-Holt was to make an initial court appearance before a US magistrate in Houston today. The federal criminal investigation began in June 2008.
The group's chairman, Allen Stanford, a Texas billionaire with dual US and Antigua Barbuda citizenship, is already facing civil charges accusing him of orchestrating a "massive" fraud in the sales of $8 billion in high-interest certificates of deposit issued by the Antigua-based Stanford International Bank.
The Justice Department said Ms Pendergest-Holt concealed her role in and familiarity with the Antigua bank's investments when Securities and Exchange Commission investigators questioned her earlier in February.
The SEC filed civil charges against Mr Stanford, Ms Pendergest-Holt and chief financial officer Jim Davis on February 17th. A court-appointed receiver took control of Mr Stanford's assets.
In all, Mr Stanford claimed to oversee about $50 billion in assets, but the criminal complaint quoted a company lawyer as saying the SEC told him it was only interested in the certificates of deposit.
Ms Pendergest-Holt's lawyer said after the arrest that "she is looking forward to having the truth come out and to putting this whole affair behind her as soon as possible."
The complaint against Ms Pendergest-Holt said she failed to tell investigators she had served on the Antigua bank's investment committee and that the investment portfolio holding more than 80 per cent of its assets included a $1.6 billion loan to Stanford "Executive A" - evidently Stanford himself.
It said Ms Pendergest-Holt also wrongly denied she had prepared with company officials before her SEC interview on February
10 and said a Stanford attorney had sought to keep the top executives from being questioned.
Reuters