HOUSTON — It was a deceptive fax sent from a fake office in London that led R. Allen Stanford’s former finance chief to conclude that his high-flying billionaire boss was a fraud.
James Davis, a college roommate of Stanford’s who went on to become his moneyman, told a federal jury in Houston yesterday that in the summer of 1991 Stanford handed him a document and asked him to fly with it to London. There, he was to take the document to a 10-foot square cubicle and fax it to a potential client.
The purpose of the trip, Davis testified, was to hide the fact that the company named on the document’s letterhead, British Insurance Fund Limited, didn’t actually exist. That company was supposed to be insuring the CDs deposited in Stanford’s bank, Davis said, when in fact BIF Ltd. was a purely paper creation.
Shortly after this, Davis told a packed Texas courtroom, he began to make a joke of shuffling into Stanford’s office as if his wrists and ankles were bound together, as if he were walking in shackles.
The point, he said, was to let Stanford know that if they continued operating as they were, they would end up behind bars.
Davis, who has pleaded guilty to securities fraud, admitted that he had committed crimes and said he had helped Stanford, who is accused of bilking investors out of $7 billion, even as he raised questions with his boss.
Davis described Stanford as a charismatic but dictatorial boss, one who would fly into a rage if Davis made a decision without Stanford’s approval and who operated through “flattery, intimidation and fear.”
Asked by prosecutors why he stayed in his job, Davis choked back a sob and answered, “because I was greedy.”
All told, Davis said, he earned some $14 million during his time with Stanford.
Allen Stanford, Stanford, British Insurance Fund Limited
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