February 27, 2009
FBI agents have arrested the chief investment officer of troubled Stanford Financial Group, accusing Laura Pendergest-Holt of obstructing a Securities and Exchange Commission fraud investigation.
The SEC has been investigating allegations of an $8 billion investment fraud involving Texas billionaire R. Allen Stanford''s financial group. Stanford was served legal papers by FBI agents last week and ordered to surrender his passport, but has not been charged with a crime.
Pendergest-Holt, of Baldwyn, was arrested Thursday in Houston, Texas, where Stanford Financial Group is based. She is a graduate of Mississippi University for Women and serves on the MUW Foundation board of directors. However, according to Foundation President Dr. Gary Bouse, Pendergest-Holt has not attended the past three meetings of the board -- including a meeting held Thursday. Foundation bylaws state board members who have three absences in a row are to be removed from the board unless special consideration is granted by the board chairman.
"Laura was not in attendance at yesterday''s meeting of the MUW Foundation board of directors. The MUW Foundation is in the process of contacting her regarding her status on the board. We appreciate her service on the Foundation board and wish her the very best in the future," said Dr. R. Edward Betcher, chair of the MUW Foundation,in a statement released this morning.
Stanford has offices in Tupelo and Columbus.
The FBI said Pendergest-Holt was taken to the federal detention center and would appear in federal court Friday morning for an arraignment.
"She is looking forward to working with the government to get all the facts out and put this behind her," her attorney Brent Baker said Thursday night.
The government alleges in a federal complaint that Pendergest-Holt obstructed the investigation with some of her answers to SEC investigators'' questions, including failing to reveal to the SEC how much she knew about investments in Stanford International Bank Ltd.
The FBI said in an affidavit that Pendergest-Holt repeatedly misrepresented how much she knew about the bank''s Tier III portfolio, which represented about 81 percent of the bank''s portfolio, and did not let the SEC investigators know she had learned of a $1.6 billion loan to a shareholder.
The complaint also alleges that Pendergest-Holt did not reveal that she was a member of the bank''s investment committee.
"We appreciate the quick and decisive action of the Department of Justice and the FBI, and thank them for their fine work and cooperation in this matter," SEC Deputy Enforcement Director Scott Friestad said in an e-mail.
Stanford is accused in civil charges of lying about the safety of investments he sold as "certificates of deposit" and promised unrealistically high rates of return. Regulators also said he faked historical data about other investments which he then used to lure in more investors for the CD products.
Michael Zarich, the company''s senior investment officer, has told authorities he didn''t know where 90 percent of Stanford''s portfolio was invested. Zarich has said he was trained by Pendergest-Holt to deflect questions about the investment strategy while pitching to wealthy clients in Antigua, where the bank was chartered.
When he tried to learn how the money was invested, Zarich has said Pendergest-Holt and Stanford''s deputy James Davis turned him away. Zarich also has said Pendergest-Holt armed him with answers for potential investors worried about the size of Stanford''s tiny, Antigua-based auditor.
This story contains reporting from Dispatch staff writer Wade Leonard.