HOUSTON -- The star prosecution witness at the fraud trial of Texas financier R. Allen Stanford expressed remorse Tuesday before being sentenced to five years in prison for helping to bilk investors out of more than $7 billion in one of the biggest Ponzi schemes in U.S. history.
James M. Davis had faced up to 30 years in prison after pleading guilty in 2009 to three fraud and conspiracy charges. At Stanford's trial last year, Davis testified that as chief financial officer of Stanford's companies, he helped the financier fake his bank's profits and fabricate documents to hide the fraud.In a brief statement, Davis said he will feel regret the rest of his life."I am ashamed and I'm embarrassed," Davis, 64, said at the sentencing hearing in Houston federal court. "I've perverted what was right and I hurt thousands of investors. I betrayed their trust and also associates and neighbors and friends and my family."Many of the dramatic details at Stanford's trial -- including testimony about bribes and blood oaths -- came from Davis, who portrayed his former boss as the leader of the fraud, which burned through billions in deposits. Stanford, a onetime billionaire, was convicted in March of 13 fraud counts and sentenced to 110 years.Prosecutor Jason Varnado had asked that Davis get a 10-year term. He told U.S. District Court Judge David Hittner that while Davis' cooperation in the case was outstanding, he came to authorities only after Stanford's business empire was shut down and he had no other options. Davis' sentence should reflect the severity of his crimes, Varnado said."Mr. Davis for 20 years lied and deceived thousands of investors, employees and the public and helped Allen Stanford commit one of the largest frauds in American history," he said.Defense attorney David Finn said Davis' cooperation contributed greatly to the government's efforts to find and secure funds for investors."I'm not here to tell your honor my client was a saint," Finn said. "He was remorseful, contrite and tried to make amends for the injuries he's inflicted."Prosecutors say Stanford persuaded investors to buy certificates of deposit from his bank in Antigua, then used that money to bankroll a string of failed businesses and his lavish lifestyle, including a fleet of private jets and yachts.Stanford's attorneys accused Davis of being behind the fraud and tried to discredit him by calling him a liar and a tax cheat and telling jurors of his extramarital affairs.On Tuesday, Hittner ordered Davis to report to prison within 60 days, allowing him time to meet with investors who have sued banks, law firms and others accused in the fraud.Angela Shaw, a Dallas-area woman who founded the Stanford Victims Coalition after her relatives lost $4.5 million, said that Davis' sentence was "a little light" but that she is grateful for his cooperation in the investigation.A receiver appointed by a federal judge in Dallas to oversee the recovery of Stanford assets this month announced a plan to make an initial distribution of $55 million to investors who lost money. Shaw's group has criticized the proposed distribution, saying it represents a recovery of 1 cent on the dollar.Have more to add? News tip? Tell us
