Former Stanford colleague jailed for five years

Former Stanford Financial Group Co. finance chief James M. Davis was yesterday sentenced to five years in federal prison for his role in a 20-year, US$7 billion international fraud scheme, according to Bloomberg.

U.S. District Judge David Hittner in Houston also sentenced Davis, who faced as long as 30 years in jail, to three years of post-release probation. The court also handed down a US$1 billion money judgment against Davis, Bloomberg reported.

Prosecutors had sought a 10-year term for Davis, 64, who pleaded guilty to felony charges in 2009 and testified against financier R. Allen Stanford, who is serving a 110-year sentence in a federal prison in Florida. Davis’s attorney had asked the judge to cap the sentence at four years, citing his client’s cooperation and early acceptance of responsibility.

Stanford’s business empire included the Antigua-based Stanford International Bank Ltd. which offered certificates of deposit and the Houston-based Stanford Group Co. brokerage that sold them. Several Guyanese institutions lost money by investing in these certificates of deposit which carried above market rate of returns.